Adwords Fundamentals

If you bid $2 for a click and the next highest bid is $1.25, how much will you pay?

If you bid $2 for a click and the next highest bid is $1.25, how much will you pay?

  • $2
  • $1.24
  • $1
  • $1.26

The Correct answer is:

  • $1.26

Explanation: With Manual Cost-Per-Click (CPC) bidding, you can set a maximum price on the cost of someone clicking on your ads. You can get good value with this bidding method because you pay only when a viewer is interested enough to click your ad and learn more. Internet ads are different: With Google Ads CPC bidding, you only pay for Google’s “billboard space” when you know users saw your ad and were motivated enough to click. If 100 people view your ad and three clicks it, you pay for the 3 clicks, not for the other 97 views.

Example

If you think it’s worth US$.25 to have someone visit your website, you can set US$0.25 as your max. CPC. You’ll pay a maximum of US$0.25 when a person reads your ad and clicks it, and you pay nothing if they don’t click.

Let’s say you create a text ad and set a max. CPC bid of US$0.25. If 500 people see the ad, and 23 of them click to learn more, you pay only for those 23 clicks. Your max. CPC bid was US$0.25, so you’ll pay no more than 23 clicks x US$0.25, or US$5.75.

Often you’ll pay less than your max. CPC because with the Google Ads auction, the most you’ll pay is what’s minimally required to hold your ad position and any ad formats shown with your ad, such as site links. Read the section below on actual CPC to learn more about the final amount you’re charged for a click.

More read: https://support.google.com/google-ads/answer/2464960?hl=en

Ali Raza

Ali Raza is a Web Developer and Digital Marketing Consultant.

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