Definition: A type of advertising revenue model where advertisers are charged for every click on an ad in the publisher’s platform. Also called PPC or Pay per Click.
Explanation:
No matter which website you visit or even if you’re just looking for something on the internet, there’s a huge chance that you will see an ad placed somewhere.
Ads work like magic when it comes to increasing brand awareness and attracting more traffic to your landing page.
That’s why advertisers launch campaigns through companies that help them achieve that goal like Google for example.
Google is a popular search engine that almost anyone trusts nowadays and it’s also a good advertising company to launch CPC campaigns.
CPC is a type of advertising model is commonly used by advertisers who have set a limit for their campaigns.
Cost per click can be calculated by dividing the total cost of clicks by the number of clicks.
CPC = Total Cost of Click / Number of Clicks
For example, the total cost of clicks is $10 for 1000 clicks. You can calculate CPC by $10/100 = $0.1 per click.
Rates may vary on the advertiser and sometimes it can get more expensive but also straightforward since it doesn’t require good SEO.
Why is Cost per Click Important?
Cost per click is very important since it helps determine how successful you want your paid campaigns to be.
It also helps in understanding the results so you can make the necessary adjustments in maximizing your campaign performance.
And if you want to get good results in your campaigns, it’s recommended to measure CPC since it helps in:
- Driving more traffic
- Understanding the best ad type to use
- Determining the right bidding strategy
Different types of CPC Ads
The following types of CPC ads are used by companies who want to drive more traffic to their landing pages and generate a good amount of conversions:
Social media ads
Social networking sites like Twitter, Facebook, LinkedIn, Instagram, etc, are good platforms to run CPC campaigns since they have a huge amount of traffic on their network.
Retargeting CPC ads
This type of CPC campaign uses cookies that are stored in a user’s browser to help advertisers display ads that are based on the previous websites they visited. So if a user visited a website that sells cookies, they are most likely to see an ad from a company that sells cookies, pastries, etc.
Google search engine advertising
Google is well-known for running ads on their platform since it is where users are most likely looking for answers to their problems or questions. Running this type of campaign uses keywords that are relevant to what the user types in the search engine bar.
Affiliate marketers can also earn commissions by promoting products from companies that run CPC campaigns in an affiliate marketplace that they’re in. This strategy can be very effective since publishers are the ones promoting products on their platforms and are only getting paid if someone clicks on their link.
What is Google Ads?
Google Ads is a large advertising company that helps advertisers place their ads on Google properties like YouTube, Google Search, etc.
Big companies like using Google Ads since it allows them to easily advertise and gets their name out there.
It’s also cost-effective since advertisers can set a maximum cost per click that Google will automatically follow depending on how they wish their campaigns to appear, whether it’s global or local.
Think about watching a video on YouTube and randomly end up watching a campaign about a new brand before you can even watch the actual video.
Sometimes it may even get to that point when it gets so annoying because it’s stuck in the memory care of your brain, and you even find yourself singing the jingle or saying the lines as it plays.
Google AdSense
Google AdSense is also similar to Google Ads but is most likely designed for publishers who want to monetize their platforms.
When a publisher signs up for Google AdSense, they can earn commissions each time a visitor clicks on the ad that is placed by the advertiser on their platform.
Both Google Ads and AdSense are very effective in CPC campaigns.
What determines the cost per click?
According to WebFX, there are three factors that determine your CPC no matter which search engine your campaigns appear:
Maximum cost per click
This is set by the advertiser as the limit or the highest value that they are willing to pay for every ad click.
However, this doesn’t mean that this limit is the actual value that will be paid since it can also vary depending on where the ads are placed.
Quality Score
Quality score is a rating that search engines use to determine if your ads will appear on search results through keyword relevancy, landing page quality, and click-through rate.
Ad Rank
The Ad Rank is the value that determines the position of your ads and is calculated using maximum CPC and quality score.
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