AdWords allows you to bid for the ads in different ways. These options are customized for different campaigns you may have. First of all, let us look at diverse techniques of bidding.

1. CPM bidding

Bidding is made considering the goal or objective of the advertiser. If your objective is to get impressions from the viewer, CPM or cost-per-thousand-impressions bidding is most excellent for you. The advertisers set their bid under CPM for each impression rather each click. This method is used to price for every add placements. Under this system, you have to bid the maximum amount you are willing to pay for every thousands of impressions.

2. CPC bidding

In cost-per-click (CPC) method you are charged for every click made by the visitor on your ads. So, you don’t need to pay for the placement of your ads in a website. You pay just when someone clicks on your ads. Cost-per-click is widely used and well-accepted method of bidding among the AdWords ad providers.

Now, question might arise on how your ads will appear prior to others ads. In case of CPC bidding, you determine the maximum price or cost that you are willing to undertake for clicks on the ads. The more you increase the maximum cost-per-click, the more the chances increase to appear your ads in the search or display network.

3. ECPC bidding

Enhanced cost-per-click is an improved version of the CPC bidding. Under this method, the system automatically increases the bid for clicks that may generate revenue for you. In other words, it increases the bids for clicks that have conversion potentiality.

To use this technique, you must activate conversion tracking; a free tool in AdWords to track conversions from clicks generated. This shows whether the system is increasing bids for the right clicks or not.

4. CPV bidding

Cost-per view bidding is used for ads with interactive flash contents or AdWords videos. So, you are setting the price for only the visitors who are watching the videos. Like other techniques, you can set the maximum CPV to place your ads prior to your competitors.

5. CPP bidding

The CPP or cost-per-phone call bidding is used by the ad providers who want to get a call from the ad viewers or customers. You must bid at least 1.00 dollar for cost-per-phone and bid higher to increase the rank of the ads. This method can be used collectively with CPC; one for the clicks made by the visitor and another for the phone calls made the visitors.

6. CPA bidding

You can maximize your outcome by using the CPA or cost-per-acquisition bidding. Conversion indicates the successful clicks you get or the clicks that bring customers (not visitors) who will have account with you. Conversions are performing clicks and under this bidding method you pay only for the conversions, not for the clicks.

You can set the maximum and target CPA for each and all the ads consecutively. AdWords can also recommend you about this bid amounts. All this can happen if you use the conversion optimizer tool of AdWords.

Now that we know the bidding techniques, we should also know the suitable techniques for different goals of the advertiser –

• If your objective is to attract the public to visit your website, CPC bidding is the right one. With the help of AdWords, you can do this job more effectively if use automatic bidding systems.
• If you just want to place your ads before the visitors to receive their impression rather want them to click on them, visit your landing page, and create account with you, use the CPM bidding method. You will only be charged for the times your ads are placed on the internet.
• Suppose your goal is to show your interactive ad (AdWords video ads) when the visitor clicks on the ads. Place amounts in the CPV bidding to pay only for the visitors who have watched your video advertisements.
• More importantly, if your foremost goal is to convert the visitors into performing customers, you must use CPA or cost-per-acquisition bidding.

AdWords is offering you a lot of bidding options. Now it depends on how do you define your goals and what is material for your business, its vision, and mission.