In online marketing there are an infinity of terms that leave those who approach them for the first time with a stunned face. One of them is the cost per click, or its abbreviation, CPC. Read on to find out what it is and how to calculate it.
What Does Cost Per Click (CPC) Mean?
Cost per Click is a billing model that appears especially in the field of online marketing. Advertising measures such as advertisements, banners or links are billed through this model. An expense is only incurred when someone clicks on an advertising measure.
Like other online marketing terms, this one comes from the English-speaking environment, and can be translated as “cost per click”, or also as “price per click”.
A term of equal meaning is “Pay-per-Click“, whose abbreviation is PPC, which for its part is used more frequently in the field of affiliate marketing . Instead of paying for each click, affiliate partners pay in this case for each click they generate.
How Do You Work With Cost Per Click (CPC) And Why Is It Such A Relevant Index?
As soon as an advertisement is activated online, be it on Facebook, Google or elsewhere, an estimated click price is indicated in advance. If this index is known, it is possible to decide the amount that the daily expenses may have or will have.
CPC is the amount that a page owner receives when a paid ad located on the page is clicked. Business is increasingly developing online, and advertising follows the trend.
Put more simply:
A marketer would then pay € 100 per 1000 clicks if they advertised on a web page where the CPC was set at 10 cents .
The price that an advertiser pays for a click is generally set either by a formula (for example Facebook) or by a bidding procedure (for example Google Ads) or directly with the website administrator or publisher.
It’s good to know:
It is estimated that worldwide online advertising generated about $ 170.5 billion in 2015.
There are many advertising intermediaries, such as Media.net, PropellerAds or Chitika, but the biggest player is and will continue to be Google AdWords.
Google AdSense / Google Ads And The Calculation Of Cost Per Click (CPC)
Website owners can commission Google to place advertisements on their website. Ads can include a combination of text, images, or videos, and can be posted directly to Google Ads.
The Cost per Click (maximum and average) is also indicated there.
The price of the click for the keyword “Lawyer Madrid” amounts to approx. € 3.50; at approx. € 1.40. Extrapolating it to just 100 clicks you can see a drastic rise. That is why a maximum bid should always be set.
But even within a keyword group there can be huge price differences. It can be said that the closer a search term is to the purchase , the more expensive the click is.
This is the Google Ads CPC formula:
Competitor AdRank /Your Quality Score +0.1 = Actual CPC