One of the most common questions we hear from advertisers running BookBub Ads campaigns is whether CPC (cost per click) or CPM (cost per thousand impressions) bidding is best. The short answer is, “it depends” — for the long answer, keep reading!
There are benefits and trade-offs for each of these bidding strategies, but there are some situations that favor either CPC or CPM. We’ll break down some of the most common scenarios and advertising strategies where we recommend one bidding strategy over the other, but remember, these are just suggestions — if you feel more comfortable using a particular bidding strategy, you can always stick with the one you prefer!
First, let’s cover the differences between these two bidding strategies.
CPM: You pay whenever your ad appears in a BookBub email, Chirp email, or BookBub website page. You tell us the maximum dollar amount you are willing to pay per 1,000 impressions, where one impression equals one ad appearance, or one opportunity for a reader to view your ad.
CPC: You only pay when a reader clicks on your ad. You tell us the maximum amount you’re willing to pay for each reader who clicks on your ad, and you pay for the readers who actually engage, rather than those who may have seen your ad but didn’t take any action.
Whichever strategy you use, your bid determines how competitive your ad is relative to other ads targeting the same readers in our auction. A high bid means you’re more likely to win auctions and get your ad in front of readers, but it can also make your ad more expensive. That trade-off between exposure and cost is the primary tension in setting a bid amount, and the choice between CPM and CPC can often be viewed through a similar lens — CPM bidding tends to prioritize exposure and visibility of an ad, whereas CPC bidding is more focused on managing costs and ensuring a positive return on investment (ROI). So when choosing between bidding strategies, you should always start by determining your goals and priorities for that particular campaign.
When to use CPC ☝️ vs. CPM 👀
To control your costs – CPC ☝️
CPC bidding gives you the greatest control over your campaign’s cost-per-click and ensures you don’t burn your ad budget on readers who didn’t engage with your campaign. CPM bidding can also be cost-effective, but it’s much riskier to pay for impressions that may or may not deliver any clicks. If you’re concerned about spending too much too quickly on your ads, CPC bidding can give you greater control and predictability over your campaign costs. Learn more about the benefits of CPC bidding for running cost-effective ads, and get tips from successful CPC advertisers on how to make the most of this strategy.
To win more impressions – CPM 👀
With both bidding strategies, increasing your bid increases the chances that your ad will win more auctions, but if your ad is really struggling to win impressions, a high CPM bid is a surefire way to boost your ad’s visibility. Just remember that impressions may not result in clicks if you haven’t optimized your ad image or your targeting! For more information on how to adjust your campaigns to boost impressions or clicks, check out our troubleshooting tips.
If you have a smaller advertising budget — CPC ☝️
CPC bidding is the best choice to maximize a modest ad budget because you’re only paying for the most valuable readers — the ones who actually click on your ads. Of course, you still need to make sure your ad is earning clicks! To increase the click-through rate (CTR) of an ad, make sure to target a highly relevant audience (we recommend using author targeting to reach the most engaged readers!) and design an ad image that speaks directly to your audience’s interests.
To run test campaigns – It depends! 👀☝️
The best way to figure out which combinations of ad targeting and images work best for your books is by running test campaigns — low-budget ads designed to compare different ad elements. Both bidding styles can be used when you want to compare results between campaigns, but they’re suited to different testing strategies.
CPM bidding can get you results fast — a high CPM bid guarantees you’ll win impressions quickly for your test campaigns. When comparing two CPM ads with the exact same bid, our auction will randomly choose the winner, so CPM ads can deliver clean, randomized test results. However, running lots of CPM tests can mean spending a lot of money on ads that win impressions but don’t earn many clicks.
CPC bidding can also be used to compare campaigns, but often requires more patience. This is because the auction takes the CTR of CPC campaigns into account when determining how competitive a campaign is relative to other campaigns — CPC ads that get lots of clicks are rewarded with more impressions, but CPC ads with low CTRs will eventually stop winning new impressions. So it may take more trial and error to develop a CPC campaign that generates enough clicks to continue competing successfully in the auction, but you won’t waste any of your advertising budget on low-performing test campaigns in the process of figuring out which ads perform best.
Learn how to set up CPM test campaigns here, and discover how other advertisers use CPC to run cost-effective tests.
To run short-term campaigns – CPM 👀
CPM is the best option to guarantee your ad will get visibility among your target audience if your campaign will run for only a few days. This strategy is most effective if you’ve already tested your images and targets and are confident that the readers who see your ad will be highly likely to click.
To run long-term campaigns – It depends! 👀☝️
If you’re running a continuous campaign with a low daily budget for many weeks or months, either CPM or CPC bidding can be a good option! If you want to maintain consistent exposure to your audience, a higher CPM bid can help ensure you spend your entire daily budget each day. On the other hand, a CPC bid can get you more bang for your buck by spending your daily budget on only the most engaged readers, and lets you extend your total campaign budget over an even longer period of time.
For a positive ROI – It depends! 👀☝️
Both CPM and CPC ads can effectively generate a profit if your ad is well-optimized. CPC bidding lets you limit how much you spend per click, which makes it easy to keep a campaign affordable (though don’t forget that you can usually bid slightly higher than your target cost-per-click, since your bid is the maximum you’re willing to pay — you often pay less!).
CPM bidding can also be cost-effective if you can generate a high CTR — let’s say you run an ad that wins 5,000 impressions, and 100 of the readers who saw an impression clicked on the ad. If this ad had a $10 CPM bid, you would pay up to $50 (5,000 impressions at a rate of $10 per 1,000 impressions), with an effective cost-per-click (eCPC) of $0.50 (you paid $50 and received 100 clicks).
Now, imagine the CTR of this ad went up, and your 5,000 impressions generated 300 clicks. The campaign would still cost you $50 (5,000 impressions at a rate of $10 per 1,000 impressions), but the eCPC would drop to $0.16 ($50 for 300 clicks). You can find tips for increasing the ROI of your ad campaigns here.
For further guidance on ads bidding, including how to decide how much to bid, check out our bidding strategy guide (and downloadable bidding calculator!).
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