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What is CPC ?

CPC or Cost Per Click is a payment model where advertisers pay every time a user clicks on an ad, regardless of the number of impressions. This payment model is typically used on platforms like Google AdWords and is preferable to CPM as advertisers can pay for meaningful engagement, as opposed to the number of impressions. CPC is also often called PPC (Pay Per Click).

With CPC, it’s important to optimize the sales funnel and understand how the advertising network generates clicks and approaches targeting. Publishers’ main interest is in getting as many clicks as possible, regardless of the source, which is why it’s important to optimize targeting to exclude as many imprecise clicks as possible, and increase the quality of traffic your website is receiving. What is a good CTR in CPC and why is it important? CTR is an important metric for CPC campaigns since it measures the ad’s efficacy in attracting the user’s attention. A high CTR indicates that a significant number of individuals who view the ad click on it, indicating that the ad is relevant and interesting. A low CTR, on the other hand, indicates that the ad is not connecting with the audience, and the advertiser may need to tweak their targeting, messaging, or creativity to improve the ad’s effectiveness.

With PPC platforms, CPC is typically calculated through a variety of factors such as ad quality, ad rank, and maximum bids. CPC is among the most competitive payment models and platforms exactly due to almost guaranteed success. However, average CPC depends on the industry.

Many advertisers improve ad creative, keyword relevance and landing page quality as a means of lowering their CPC.

The formula for calculating CPC is ;

CPC = Total ad spend / Total measured clicks.

 

Related Articles:
Related Glossary Terms:
  • Ad Inventory
    Ad Inventory or Advertising Inventory is a term that describes the advertising space that each publisher has, and which advertisers can buy to host their ads.
  • Cost Per Click
    CPC or Cost Per Click is a payment model where advertisers pay every time a user clicks on an ad, regardless of the number of impressions. The cost per click bidding mechanism decides how much advertisers pay for their advertisements.
  • Cost Per Engagement
    Cost Per Engagement model means that an ad is paid only when it’s engaged with, as opposed to other payment models such as CPC and CPM. CPE is a pricing model for advertising in which digital marketing teams and advertisers only pay for ads when consumers interact with their campaign in some way.
  • CPE
    CPE model means that an ad is paid only when it’s engaged with, as opposed to other payment models such as CPC and CPM. The cost per engagement, or CPE, is the cost incurred time an advertisement is viewed. Engagements might range from muting or stopping a video to providing contact information.
  • eCPM
    eCPM is an advertising term that stands for Effective Cost per Mille (thousand impressions). It is helpful since it translates everything to a single measure in situations where several forms of pricing and advertising (such as CPC, CPA, etc.) are utilized.


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