Clicks on product ads are charged on what basis with Microsoft Advertising?

Cost per thousand impressions

Cost per click

Cost per acquisition

Certification program: 👉 Microsoft Advertising Shopping certification exam

Explanation: Clicks on product ads in Microsoft Advertising are charged on a cost per click (CPC) basis. This model is particularly advantageous for advertisers because it ensures that they only pay when a user demonstrates a direct interest in their product by clicking on the ad. Unlike the cost per thousand impressions (CPM) model, which charges advertisers for every thousand times an ad is displayed regardless of user interaction, CPC directly ties advertising costs to user engagement. This makes CPC a cost-effective strategy, especially for businesses aiming to optimize their budget by paying only for actual clicks that lead to potential conversions. Additionally, CPC aligns well with performance-based marketing goals, providing clearer insights into the return on investment (ROI). Advertisers can easily track the number of clicks and compare this with the subsequent conversions and sales, thus enabling more precise adjustments to their campaigns to maximize effectiveness. Furthermore, the CPC model encourages the creation of high-quality, compelling ads designed to attract genuine interest, as advertisers are motivated to generate clicks that have a higher likelihood of leading to conversions. This focus on quality benefits the overall user experience by reducing the likelihood of irrelevant or intrusive ads. Microsoft Advertising’s CPC system also supports competitive bidding, where advertisers set the maximum amount they are willing to pay for a click, allowing for budget control and strategic bidding based on the value of each click to their business. This competitive aspect ensures that ads are shown to the right audience at the right time, further enhancing the potential for successful engagement. In summary, charging on a cost per click basis is a strategic and efficient approach within Microsoft Advertising, aligning advertising costs with user interaction and providing a clear pathway for measuring and optimizing campaign performance.

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