Cost-per-view (CPV) bidding is the default way to set the price that you'll pay for your AdWords video ads (when created with AdWords for video). While traditional display ads charge you for impressions, with CPV you pay only when a viewer watches your video.
With traditional online text ads or image ads, customers on the web may see your ad, read its text and click your URL to go directly to your site. This type of interaction doesn't take interactive content like video ads into account. With CPV bidding, you won't be charged for just an impression or a video interaction click on your ad.
With AdWords for video reporting, you're able to evaluate how engaged viewers are with your content, where they choose to watch your videos and when they drop off from watching your content.
Setting a CPV bid
To set a CPV bid, you enter the highest price that you want to pay for a view while setting up your AdWords for video campaign. Your bid is called your maximum CPV bid, or simply "max CPV". This bid applies at the campaign level, but you can also set a CPV bid per ad format.
If you think it's worth 25p to have someone watch your video, you can set £0.25 as your max CPV. For an in-search or in-display TrueView video ad, you'll pay a maximum of £0.25 when users begin watching your video. For in-stream, you'll pay the maximum CPV when the user watches 30 seconds or sees the end of the ad, whichever comes first. You pay nothing if they don't initiate the video or drop off from the video before the minimum amount of time passes.
You can also set a lower bid for your in-search TrueView video ads than for your in-stream video ads.
The amount of time required for a video play before you'll be charged depends on the video ad format. Check out the available AdWords for video formats to learn more.
How CPV affects your ad rank
The max CPV that you set helps determine your ad's position among other ads on search results pages in the Search Network (including YouTube search results) and Display Network pages (which include YouTube as a publisher).
In both cases, a higher CPV will increase your ad's chances of appearing, and increase your ad's chances of appearing in a higher position compared to other advertisers' ads.
Your actual CPV
Your maximum CPV bid is the most that you'll be charged for a video view, but you won't always be charged this maximum amount. Wherever possible, we'll try to charge you only what's necessary for your ad to appear on the page. The final amount that you actually pay for a view is called the actual CPV.
Actual CPV is often less than max. CPV because with the AdWords auction, you pay no more than what's needed to rank higher than the advertiser immediately below you.
Let's say that your max. CPV is £5.00, and there are two other advertisers in the auction with you with the same Quality Score. One bids a CPV of £1.00 and another bids a CPV of £3.00. Since there are no other competitors bidding more than £5.00, you're the top bidder. However, we're not going to charge you £5.00 if your closest competition is only bidding £3.00. We'll charge you £3.01 for your video play.
Two other elements that affect the actual CPV that you pay: Quality Score and ad rank. Your Quality Score is a measure of how relevant your ad is to a customer, and includes multiple performance factors like view rates. Once your Quality Score is determined, it's multiplied by your max CPV bid to rank your ads among other advertisers. That's called Ad Rank.
Once all ads have been ranked, the actual CPV for your ad is based on an equation that considers the ad rank of the bidder below you and your Quality Score.
The highest ranked ad wins the highest placement on the page, and the cost for a video play for this ad (the Actual CPV) will be just above the CPV bid of the next ranking ad.
How to set your CPV bid
You can set your max CPV bid when setting up your campaign as you select your targeting groups. You can select a default max. CPV bid for all ads associated with a targeting group, or define an individual CPV bid per TrueView video ad format. You can also set a unique bid per targeting type (placements, keywords, topics, etc.).
How to decide what CPV bid amount to set
How do you know what CPV to set? You can base this amount on the traffic forecasting data that we present as you select your targeting settings and max CPV when building a new campaign (or managing your targeting groups later). You can also base this on what you know about your business and the value of a sale. For example, if you sell handcrafted jewelry pieces that cost £1,000 each, one new customer is probably worth more than if you sell books for £8.00. You may set a CPV of £50 for your jewellery ads, and a CPV of £1.00 for your books.