Cost-per-Click

Digital marketers often rely on PPC advertising to drive more customers to their websites. In order to optimize the process, there are multiple KPIs to track, including Cost-per-click. Here’s everything you need to know about this metric!

TRACK YOUR COST-PER-CLICK!

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What is cost-per-click?

Cost Per Click is a KPI that relates to PPC Marketing and Online Advertising. It can be described as the price you pay for each click on your ad. Factors like quality score, ad rank, and bidding strategy will affect the cost-per-click results for your ad.

Your actual CPC also depends on the format of ads you run, such as display ads, or video ads. Target audience and how competitive your search terms are will impact how effective your bid amount and click cost will be for relevant ads. Ad placement will also vary on search engines like Bing, Google, display network, and other social media platforms like LinkedIn, or Facebook ads. Typically, you can track your CPC alongside other click advertising metrics like click-through rate, cost per action (CPA), conversion rate, and CPM (cost per mille).

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How to calculate Cost-per-click

Cost-per-click, or CPC, is calculated by dividing the advertising cost by the number of clicks generated by an advertisement. For example, if an advertiser paid $50 for 500 clicks on its ad, then the cost per click is 50/500, or $0.10.

The amount you pay for a click depends on how competitive your industry is. More competition typically means higher costs to get your ad seen. Things like location, market niche, and competition will also determine how much money your business will pay per click.

Cost-per-click formula (CPC calculator)

Cost per click = Advertising cost / number of clicks

What is a good cost-per-click?

A good cost-per-click can be different depending on the product or service you’re advertising. In general, a good cost-per-click allows you to pay less than your profit from a sale, and get more sales than you would with any other kind of paid advertising model. When you run a PPC campaign, you set an average CPC bid (the maximum amount you want to pay for each click) and the advertiser serves your ad to users until that budget runs out.

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What is a bad cost-per-click?

A bad CPC is generally when your click-through rate, or CTR, is costing more than the resulting revenue from the advertisement. Return on investment, or ROI, is what you’ll ultimately use to determine whether the CPC was good or bad. It is up to you to understand your average cost and determine whether it is worth it or not to attain your clients. Some companies are willing to invest money in the short term because it may result in customers they can sell more to in the future without ad campaigns.

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Cost-per-click best practices

Optimize your cost-per-click with these best practices.

Perform a keyword research

Keyword research is the first step to a successful PPC campaign because if you don’t know what people are actually searching for in your niche, you’ll be relying on luck, rather than data, to guide your decisions. There are many keyword research tools available online to help you choose which keywords to target like Google Adwords Keyword Planner. Don’t forget to add negative keywords to your ad group to prevent your ads from showing for terms that aren't relevant to you.

Focus on bid management

Your maximum cost or maximum bid is essential when you are looking at CPC advertising. and if you want to be successful in PPC, your bid management is going to be key. It's essential to have a keen eye for what works and what doesn’t, and also know when to stick with a keyword or change it out if it’s not working in your favor. When you have a firm grasp on your keyword performance, it’s time to cut the underperformers.

Optimize Your Landing Page

A great landing page can make the difference between a user who clicks back to the search results immediately after arriving at your site, and one who hangs around and converts into a customer or client. Optimize copy and visuals, add compelling CTAs and keep track of those landing page metrics! For eCommerce landing pages or product pages, you should also pay extra attention to your on-page SEO

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