Online advertising business model, provides many ways for cost and payment, let’s look at few.
CPC (Cost Per Click) or PPC (Pay Per Click) Bidding: It is a maximum amount an advertiser is willing to pay for a click. Advertiser will be charged only when someone click on its ads. As in AdWords , cost of an advertisement is decided based on the bidding, the advertiser can give its maximum bid amount that he is willing to pay, the actual cost incurred can be less than your Max CPC.
Ex: if you have set max CPC at Rs 100 and the current highest bid amount is Rs 90 , then you will be charged Rs 91 not Re 100 so that you outbid the highest bidder.
CPM (Cost Per Thousand Impressions) Bidding: It is the maximum amount an advertiser is willing to pay for a thousand impressions. It is mainly used with image or display ads when the advertiser’s main intention is to create awareness and increase visibility of its product/service.
CPA (Cost Per Acquisition) Bidding: It is the maximum amount an advertiser is willing to pay for a conversion. Conversion can be a sale, white paper download, sign up for a newsletter etc. It is only available if you have enabled conversion optimizer.
CPV (Cost Per View) Bidding: It is a maximum amount an advertiser is willing to pay for a view. It is only available for video advertisement, so an advertiser will be charged if someone views your ads for more than 20sec.
Cost Per Day: It is a fixed amount that an advertiser pays on per day basis. The rate is decided by mutual agreement between advertiser and Google.