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Google contextual advertising is represented by two separate services for advertisers and for advertising platforms. Google AdWords service is designed for the advertisers. This contextual advertising service allows to create and place textual, graphical, and rich media advertisements in Google as well as on websites that are the members of the Google AdSense advertising network.
How much does Google AdWords cost? The payment method depends on the settings of the advertising campaign. The advertiser may pay either for every click on his contextual ad (cost-per-click-bidding) or for every thousand of impressions of this ad (cost-per-impression-bidding). The cost per click is usually abbreviated to CPC, the cost per impression is abbreviated to CPI. CPI may be also called cost per mille (CPM) or cost per thousand impressions.
The advertiser registers his Google AdWords user account. Having logged in he can find a number of useful tools. One of these tools, Traffic Estimator, helps the advertiser to learn the average cost per click and estimated daily budget of the advertising campaign. Such information helps to calculate Google AdWords cost and predict the expenditures.
To receive the estimation you should type the required keyword (keywords) into the corresponding field and specify maximum cost per click (max CPC) – maximum sum that the advertiser is ready to spend for his ad to be displayed. If the price for the impression of your advertisement will be higher than the specified maximum CPC, the ad will not be displayed.
To see the results of the estimation you should click on the Estimate button. The advertiser receives the information about the number of global and local monthly searches by the selected keyword, estimated average CPC, estimated ad position, estimated daily clicks, estimated daily cost.
When contextual advertisements are placed on the search engine pages and on websites which participate in Google AdSense contextual advertising network neither CPC-based nor CPM-based advertisements have any advantage: all ads participate in the same bidding.
To determine the estimated ad position on the search engine pages and on websites that are the members of the Google AdSense network you should compare CPC-based ads with CPM-based ads and rate each advertisement. Ads which have higher rating will also have higher position when displayed to the users.
To compose the rating of ads with different types of payment (CPC-based and CPM-based) effective cost per mille (eCPM) is used. Effective cost per mille is the equivalent rating for CPC-based ads which is expressed in impressions.
To put it simply, effective cost per mille may be calculated in the following way:
(estimated daily cost/estimated daily impressions)*1000 where
- estimated daily cost is taken from the data provided by the Google AdWords Traffic Estimator tool;
- estimated daily impressions – average number of daily impressions calculated as one thirtieth part from the total number of monthly impressions by the selected keyword (we assume that one month consists of 30 days).
Therefore if you know how to calculate average CPC and average CPM you can estimate Google AdWords cost (i.e. estimated budget of your advertising campaign) by both types of payment. Then you can compare the estimated budgets and choose a more preferable type of payment.
Doing this you should keep in mind that if the aim of your contextual advertising campaign is to make your company or brand recognizable your contextual ads should be shown to the users as often as possible. In this case it is recommended that you choose CPM-based advertisements. If it is more important for you to make potential visitors click on the ad and visit your main website it is recommended that you choose CPC-based clicks. In this case you will have to pay only if a user gets interested in your ad, clicks on the link, and visits your site.
Google contextual advertising is an effective tool which helps to attract target visitors to your site, make your company and its products more recognizable. Competent advertising campaign management (which includes estimation of Google AdWords cost) helps to spend your advertising budget in a rational way and optimize contextual advertising costs.
The staff of our web design studio includes certified contextual advertising specialists who can boast of all required knowledge and skills in the field of contextual advertising and practical experience of successful advertising campaign management. WebStudio2U guarantees: you can be sure in the efficiency of the selected advertising platforms, high quality and relevance of the designed ads, optimal allocation of the advertising budget aimed to achieving and consolidating the highest results.
Submit a request for an advertising campaign in the leading contextual advertising networks right now!
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