If you work in marketing you have certainly heard of ‘CPC’, or cost per click. It makes up a central part of paid advertising, and analyzing it holds a very important place in PPC strategies.
Hold on, let us start from the very beginning anyway…
What does it actually mean? How does Google calculate it? What are the different types?
We will cover all of that and more in this article. If we publish a podcast for this piece as well, you will see it in this section.
CPC, CPC, what is this CPC?
Cost per click (CPC) is a measure used in pay per click (PPC) advertising, the amount the advertiser pays each time the ad is clicked. The system works on a daily budget set by the advertiser, which can change according to the competition, the sector and the season.
CPC is really the cost of an ad being shown and clicked on search engines, on social network sites and on other platforms. Because clicks and cost mount up quickly, CPC is an important measure for an advertiser. Watching your CPC and making sure it reflects your budget will help your campaigns succeed.
How do you calculate CPC?
Cost per click (CPC) is calculated by dividing the cost of an ad by the number of clicks it receives. The bidding strategy you choose will also play an important part in your advertising goals and in how you calculate your CPC.
You can also analyze your advertising strategy with more specific CPC measures such as Max. CPC, average CPC, actual CPC and the manual CPC bidding strategy.
What is ‘Max. CPC’?
Max. CPC is the highest amount the advertiser is ready to pay for a click on an ad. If the maximum CPC is set at 5.00 dollars, it means that if a customer clicks the ad you may pay up to 5.00 dollars.
To find the maximum CPC you want to set, you can use the keyword planner to find the bid figures for the top of the page; that way you can see the highest and the lowest price the cost per click of that keyword will be. Because in every auction you will pay only the amount needed to place above the advertiser below you, you generally pay less than the maximum CPC.
Setting a maximum CPC can be useful for your campaigns, since it can give you more control over your bids and budgets by letting you set different CPCs for different ad groups and keywords.
What is ‘average CPC’?
Average CPC is the amount charged to you per click on your ad. The cost is calculated by dividing the total cost of your clicks by the total number of clicks. This differs from Max. CPC because it is calculated on your actual CPC rather than on an estimate.
Put simply, it is the average cost you will spend for each ad click. Depending on your search intent, some days you may spend more and some days less. When you view your average CPC for the month, all of that is reflected as avg. CPC.
What is ‘actual CPC’?
Actual CPC is the final amount charged to you for a click. You generally pay far less than the estimate for actual CPC, because you only need to pay the minimum amount to beat a rival bidding on the same keywords.
Actual CPC can change according to the sector, the competition and seasonality. If you are in a competitive and seasonal sector, do not forget that your advertising costs will differ every month.
It matters that you have enough budget to compete in your sector; but ad rank and quality scores matter just as much as where your ad will be shown on Google.
What Is Ad Rank?
Ad rank is the score that decides where your ad will be shown on the SERP. It is set according to the bid amount, the ad quality, the competition in the auction and the user's search intent.
What Is Quality Score?
Quality Score lets you know how well your ad performs compared with your rivals. A higher quality score means your ad and your landing page are more useful to your users and their searches than your rival's ads. Expected CTR, ad relevance and landing page relevance all help you work out your final score.
If you meet all of these requirements, it will raise your chance of beating your rivals and appearing in the top positions in the search results.
What is ‘manual CPC’?
As Google becomes more automated, manual bidding strategies are becoming more limited.
Manual CPC is one of the manual bidding methods Google allows an advertiser to apply to their campaigns.
It lets you set your own maximum cost per click (CPC) for your ads. It differs from the automated bidding strategies that set the bid amount for you. Even though Google has moved towards automated bidding strategies, manual CPC is still widely popular, because it lets you set and control the maximum amount you want to pay for each click on your ads. This bidding strategy can be useful for advertisers who want more control over their campaigns and budgets.
Using the Keyword Planner
The keyword planner is an important tool for finding the CPC of the keywords you want. It provides valuable measures that can help you decide whether a keyword will be useful for your search campaigns.
You can also use the keyword research tool from Türk SEM.
Keyword Planner is a free tool you can find among the tools and settings provided by Google in your Google Ads account.
The keyword planner can help you discover new keywords by offering suggestions for keywords related to your products, your services or your website. It also lets you see the average number of searches for a particular keyword.
This is where you can weigh up the advantages and disadvantages of using a particular keyword and decide whether it will be useful for your campaigns.
Advertising on Google Ads can be costly, so it matters to check the cost of every keyword you plan to use. You can also learn this by viewing the lowest and the highest price you will pay for a keyword in the keyword planner. That way you can decide whether the keyword is cost effective for you.
The keyword planner is also a useful tool for breaking your campaigns into sections. Once you have researched the terms you want to use, you can arrange them into categories that can later become your campaigns or your ad groups.
Talk to our specialist
The world of PPC is a confusing one, full of many different abbreviations and pieces of jargon, and getting on top of all of it can be hard.
And when it is your budget in question, you want to be able to trust that your budget will be spent wisely and in places that will help your business grow.
That is where our team of award winning specialists can help.
Learn more about our approach to PPC, or get in touch with our team today.
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