There are 2 ways to bid on placement targeting. You can either bid on per 1000 impressions (CPM) or cost per click (CPC). CPM bidding is cost per thousand bidding.

You choose an amount and this is what you will pay every 1000 (its one thousand not a million) times the ad shows. So if you bid 1 dollar CPM and the ad is shown 30,000 times you will pay $30. It then does not matter how many times people click on the ad.

If they click it 10,000 times and you still will only pay $30. The problem is if no one clicks it you still pay $30. This is especially true if the ad is below the fold. Every time the page loads would count as an impression.

Using method with AdWords Placement Targeting can work if you have an ad that gets clicked a lot, but what I like to do is bid CPC (that is Cost Per Click). This way you are only paying when someone clicks on your ad. I at least always start off with a CPC basis. After time if I find that it would be more profitable to a CPM basis I would switch to it.

It is hard to determine where to start bidding with placement targeting. And to make it worse you have to wait for a human reviewer which can take 2 days or so. At least the new interface shows you your ads are waiting for review where the old interface showed nothing. I usually start out around 25 cents on a CPC basis and then wait to see if I have impressions. From there I then tweak either up or down and log my changes to see what is the most profitable over time.

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