Running a pizzeria isn’t as easy as you may think. You have to advertise your business to get people to call your business. At times, even that isn’t enough, and you’ll still face difficulties in running your business successfully. Figuring out what to do to increase your customer count can be extremely challenging.
Tracy, a pizzeria owner is having trouble deciding what bidding strategy she should do to get more people to call her business. Her options are Cost-per-view (CPV), Cost-per-thousand-impressions (CPM), Cost-per-click (CPC), and Cost-per-acquisition (CPA). Before answering which one she should use, we’ll go through each option in brief detail.
CPV is a bidding strategy used for video campaigns, and you have to pay for a view. Your video has to be interacted with, viewed for 30 seconds, or a duration if it’s shorter than 30 seconds by the viewer before it can be counted as a view. Call-to-action overlays (CTAs), cards, and companion banners can be counted as interactions with the video.
You can set the amount you want to pay for each view by setting CPV bids to tell Google how much you can pay. The Maximum CPV bid can be set while creating your ad group.
You’ll have to pay an amount that’s either equal, or less than this amount. This depends more on other advertisers’ bids. You have to choose to run TrueView video ads to have the option to use CPV bidding.
More commonly known as cost per mille, CPM is a marketing term that is used to denote the price of a total of 1,000 advert impressions on a single webpage. Like, if you’re a website publisher and you charge 2 dollars, that means an advertiser must pay $2.00 for every 1,000 impressions of your ad.
Which is quite clear as the “M” in CPM stands for “mille” which is Latin for “thousands”. This method is very common for pricing web ads. The success of this method campaign is measured by its click-through rate.
The Click-through rate is the percentage of people who have seen the adverts. For example, if an advert receives two clicks for every 100 impressions, its CTR percentage would be 2%. But bear in mind that CTR isn’t the only thing that measures the success of a CPM. If you click on an ad but don’t view it, it’ll still make some contribution.
Another name for this method is pay-per-click (PPC), and it’s used by websites to bill, basing it on the number of times an advert is clicked by a viewer. The alternative of this is CPM as mentioned above.
Most of the time, this method is used to set a daily budget, and once the advertiser hits his/her budget, the ad is then removed from the rotation for the remaining duration of the billing period. As an example, if a website sets a CPC rate of 20 cents and offers 2,000 click-throughs, it would some up to $400.
That’s multiplying the amount of money with the number of click-throughs ( $0.20 x 2000). The advertiser pays the amount set by either a formula or through a bidding process. CPI can be one of those processes.
The amount a website publisher receives when a paid advert is clicked is what CPC is. The business being done online, following adverts. Bear in mind that publishers will often look for third parties to match them with advertisers; the largest third-party of the sort being Google AdWords.
The last one is CPA, more commonly known as Cost per Action. CPA measures the cumulative costs of a customer when he/she takes action, and that in-turn causes a conversion. A conversion can be synonymous with a sale at times, and sometimes it can simply be a click, a download, or an installation.
In other words, it measures the aggregate cost so it can get a paying customer on a campaign or channel level. What makes CPA so vital is that it allows you to get a direct result by paying, even allowing you to compare performance across channels. (From Google to Instagram, for example).
As an example, if you run a campaign on Google for your online shop with a budget of let’s say $700, and at the end of the campaign, you receive 25 sales. Divide $700 by 20 conversions and you get $35 CPA. The determining factor in this is the budget you assign to acquire a client.
Bear in mind that you’ll need to know the Customer Lifetime Value. And that’s because it represents the total amount of money a customer may spend over their time on your website.
What bidding strategy should Tracy, a pizzeria owner use to get more people to call her business – Conclusion:
This article has gone through all the options Tracy has, but what bidding strategy should Tracy use to get more people to call her business? Well, the answer’s simple. She should use Cost-per-acquisition/Cost-per-Action.
Tracy should use CPA because she can pay for a direct result, or even compare performance across several channels. That makes it the best option for Tracy to increase her customers.
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