How does Google Ads charge advertisers?

Google Ads charges advertisers based on a few different payment models, with the most common being:

1. Cost Per Click (CPC):
Advertisers pay each time a user clicks on their ad. This is the most common model for search ads.

The amount paid per click depends on the competition for the keywords and how much the advertiser is willing to bid for those keywords.

2. Cost Per Mille (CPM) or Cost Per 1,000 Impressions:
Advertisers pay for the number of impressions (views) their ad receives. This model is typically used for display ads.

In this case, advertisers are charged for every 1,000 times their ad is shown, regardless of whether anyone clicks on it.

3. Cost Per Acquisition (CPA):
Advertisers pay when a user completes a specific action after clicking on their ad, such as making a purchase, signing up for a newsletter, or filling out a form.

This model is often used for more conversion-focused campaigns.

4. Cost Per View (CPV):
Used for video ads, particularly on YouTube. Advertisers pay when a user watches a video ad or engages with it, such as clicking on it or interacting with a call-to-action button.

5. Target Return on Ad Spend (ROAS):
This is an automated bidding strategy where Google optimizes the ad placement to maximize the return on ad spend. Advertisers set a target ROAS, and Google adjusts bids to meet that target.

6. Daily Budget & Bidding:
Advertisers set a daily budget, which is the maximum amount they're willing to spend per day. Google Ads will attempt to show ads within that budget.

Advertisers can also set a bidding strategy (manual or automated), which determines how much they're willing to pay per click, impression, or conversion.

The actual cost an advertiser pays is often influenced by a mix of factors including the Ad Rank, which is determined by the bid amount, the quality of the ad, and other factors like relevance and landing page experience.