Q1. What bidding strategy should Tracy, a pizzeria owner, use to get more people to call her business?
Option 1: Cost Per Acquisition
Option 2: Cost Per View
Option 3: Cost Per Click
Option 4: Cost-per-thousand-impressions
The correct answer to the question is option 1 – Cost Per Acquisition
Running a pizzeria is not at all easy. You need to put a lot of effort and develop business strategies so that people call you for placing orders. All these things are not enough, and you still may face difficulties in operating your business successfully.
Tracy is the owner of a pizzeria. She is having issues gathering customers. She is unable to decide which bidding strategy is applicable here. So what bidding strategy should Tracy, a pizzeria owner, use to get more people to call her business? Here I will answer this question in detail.
What Bidding Strategy Should Tracy, A Pizzeria Owner, Use To Get More People To Call Her Business? – Detailed Explanation
Tracy must use target cost per acquisition business strategy (CPA) for bringing her business under the prime attention of everybody. But why Target CPA? Basically, with automated target CPA, Tracy can increase the conversions by getting bids. So, as the conversion rises, your brand will get more people to call her business.
In order to decide which bidding strategy will be appropriate for Tracy, first, we need to know about the 4 types of bidding strategies. And they are,
This will also give you the answer to the question, “What bidding strategy should Tracy, a pizzeria owner, use to get more people to call her business?”
1. Cost-per-view Or CPV
CPV or cost-per-view is a bidding strategy suitable for video campaigns. And for a view, you need to pay. In this case, your video has to be interacted with or viewed for at least 30 seconds or for a specific duration if the video is shorter. Only then it becomes a view.
Companion banners and CTAs or call-to-action overlays are basically interactions with the video. By setting CPV bids you can set the amount you are willing to pay for every view.
At the time of creating your ad group, you can set the maximum CPV bid. You will pay an amount that is equal to or a little less than the set amount, based on other advertisers’ bids. For using the option CPV bidding, you need to run TrueView.
2. Cost-per-thousand-impressions Or CPM
CPM or cost-per-thousand-impressions are generally known as cost per mile. On a single webpage, the price of a total of 1,000 advert impressions is denoted as CPM. Suppose you are a website publisher and charge $2.
So, an advertiser has to pay $2 for 1,000 impressions of your ads. For pricing web ads, this method is really common. With its click-through rate, the success of this campaign is measured. The percentage of people who have seen the adverts is the click-through rate.
If for every 100 impressions, the adverts receive 2 clicks, then the click-through rate will be 2%. But this CTR is not the only thing to evaluate the success of a CPM. It will still make some contribution if you click on an ad and do not view it.
3. Cost-per-click Or CPC
The other name of CPC or cost per click is PPC or pay per click. On the basis of the number of times a viewer has clicked on an advert, it is used by the website to make the bill. In order to set a daily budget, this method is used most of the time.
The ad is removed from the rotation once the advertiser touches her or his budget. And this will continue for the remaining duration of the particular billing period. Suppose a website offers 2,000 click-throughs and the rate is 20 cents; the sum up will be $400.
So, by multiplying the click-throughs with the money, you will get the total cost. Either a bidding process or a formula set the amount that the advertiser would pay. Moreover, as it’s an online business, in order to match with advertisers, publishers often look for third parties like Google AdWords.
4. Cost-per-acquisition Or CPA
CPA or cost per acquisition is also known as cost per action. When a customer takes action, and that causes a conversion, the cumulative cost of this is measured as CPA. a conversion can be a sale, or sometimes it also can be an installation, a download, or a click.
On a channel level or a campaign, it can get a paying customer through the measurement of aggregate costs. By paying CPA, you get a direct result. This makes CPA so much crucial. With this, you will also be able to compare performance across channels.
For example, for your online shop, you run a campaign on Google with a budget of $700. And by the end of the campaign, you are able to get 20 sales. So, by dividing $700 by the conversion of 20, you get the CPA of $35. The budget you have assigned to get a client is the determining factor here.
You must know the customer’s lifetime value. The reason behind this is it represents the total amount of money a customer can spend during their time on your website.
What Bidding Strategy Should Tracy, A Pizzeria Owner, Use To Get More People To Call Her Business?
Now is the time to give you the answer to the question, – What bidding strategy should Tracy, a pizzeria owner, use to get more people to call her business? Among all the four options that Tracy has, she should go for the cost-per-acquisition or cost-per-action, or CPA.
With CPA, she will be able to pay for the direct action. And she also can check and compare performance across a number of channels. All these reasons make CPA the best option for Tracy.
Frequently Asked Questions
Q1. What Information Does A Target Cost Per Acquisition Bid Strategy Provide?
Target Cost Per Acquisition Bidding Strategy provides a significant amount of information about your ads. For example, ad group targets CPAs, a median of device bid adaptations, and previous changes in target CPAs.
Q2. Which Type Of Automated Bidding Strategy Is Target CPA?
Targeted CPA is actually a conversion-focused bidding strategy. When you are in dire need of conversions, Target CPA is your one and only weapon.
Q3. What Is Cost Per Acquisition Formula?
In order to calculate the target CPA of a campaign, all you have to do is dividing the total cost by the number of customers. But make sure that the customers are arriving from the same campaign or channel.
So, here you get the answer to your question and also learn about the four different types of bidding strategies. Have you now got what Bidding Strategy Should Tracy, A Pizzeria Owner, Use To Get More People To Call Her Business? It is important to know what results in you want. Only then you will be able to choose the proper bidding strategy.
Did you find this article useful? Let us know your viewpoints in the comment box below. Also, you can shoot your queries if you have any. We will be more than happy to help you out. Check out our latest guide on ” which Option Can You Use To Capture Potential Business Later In The Day, Even On A Limited Budget? “
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