Cost Per Click, or CPC, is the cost that an advertiser incurs for a single click on an advertisement: a link or a graphic ad. Determined automatically or manually, CPC can be an indicator of the profitability of specific marketing activities.
The rate per click can vary dramatically for different industries or even keywords to which an ad is targeted. The display of the ad itself does not generate costs, which is why it is one of the most common types of billing for search engine sponsored links.
An alternative to CPC is CPM billing (Cost Per Mille), i.e. nothing more than the cost of displaying an advertisement to 1,000 users. Which model is more beneficial? There is no clear answer to this question – much depends, for example, on the purpose of the campaign or even the services and products offered.
How does CPC work?
CPC works on the basis of an auction system in which advertisers bid for places on the search results page or on partner websites. The rate per click depends on a number of factors, such as the competitiveness of the keyword, the quality of the ad or the rate offered by other advertisers.
Why is CPC important?
CPC is an important indicator in online marketing because it allows the costs of an advertising campaign to be controlled. It allows the advertiser to set his maximum costs and not to exceed them, which allows a more efficient use of the budget.
How do you calculate the CPC?
The CPC can be calculated by dividing the total cost of the campaign by the number of clicks on the ad. For example, if an advertiser spent £500 on a campaign and the ad was clicked 100 times, the CPC is £5.
How to improve the CPC rate?
To improve the CPC rate, the advertiser can use various strategies, such as optimising the ad for keywords, improving the quality of the ad or increasing the rate offered in the auction.
The CPC is one of the most important metrics in online marketing, as it allows to control the costs of an advertising campaign. Thanks to the auction system, advertisers have the opportunity to bid for placements on search result pages or on affiliate sites, which allows them to use their budget effectively and achieve better results from their advertising campaign.