What is CPC?
First of all: what does CPC stand for? CPC stands for "Cost Per Click" — in other words, the price you pay per click, also commonly referred to as the click price.
CPC is a term used in connection with paid advertising online, referring to the price of a click — for example, a click on a Google Ads ad, an ad on social media , and similar. CPC is therefore closely related to the concept of PPC, which is the payment model: Pay Per Click.
How is CPC calculated?
CPC is calculated as: Cost / Number of clicks
Where costs are, for example, the total marketing and/or sales costs, or the costs for a specific campaign, ad, channel, or similar. The same applies to the number of clicks.
What is CPC used for?
CPC can be used as an overall KPI for what you pay per lead/potential customer.
In addition, it can be used for comparison across channels, campaigns, ads, and marketing activities to measure where you acquire new potential customers most cost-effectively.
It is important to be aware, when using CPC as a KPI, that CPC does not account for the quality of the click you are paying for. If you want to measure how profitable your marketing is, you should therefore use CPC together with your conversion rate, or make use of CPA.
What is the price of CPC?
What CPC costs in monetary terms — i.e. how high your click prices are — depends primarily on supply and demand. The more bidders there are, the higher the click prices/CPC. In addition, the quality of your website also affects the CPC price on, for example, Google Ads. The better your website (measured across various parameters), the lower the CPC.
What is a good CPC?
Since a click equals a potential customer, CPC can be said to represent the price of a potential customer. Therefore, it is largely your conversion rate and the price of your products that dictate what a good CPC is, and whether you achieve a satisfactory ROI on the given advertising channel.
For the same reason, CPC prices tend to be highest in industries where purchase amounts are large.
How high should your CPC bid be?
How high your CPC bid should be depends on how much traffic you want to receive and how much you believe that traffic is worth. How high you bid on CPC on search engines dictates, for example, how high your ad is placed. How high your bid should be therefore depends on factors such as the search term, your website, your product range, your prices, and more.
Do you want to optimise your online marketing and get the most out of your click prices? Fill in the form below, or call us on 30 12 42 72 for a no-obligation chat about how we can help you reduce your CPC costs and increase your profitability.
