Guest Author
Mar 27, 22 | 9 min read
Cost per click: learn what CPC means
Reading time: 7 minutes
Cost Per Click, or simply CPC, is the cost determined by online advertising platforms for each click made on a sponsored ad. It is also used as a metric to estimate bids in tools such as Google Ads and calculate ROI for paid campaigns. Learn more!
CPC (cost per click), CPM (cost per thousand impressions), CPA (cost per acquisition), CPL (cost per lead): this is the famous alphabet soup of Digital Marketing .
And don’t think it stops there! The lyrics vary by region and type of strategy. Also, some tools and market experts still have “fun” creating their own adaptations.
These acronyms are the most talked about within the Outbound Marketing universe , so it is common for some experienced professionals, accustomed to Inbound strategies , to feel a little confused.
However, there is no mystery in these metrics, even because they all revolve around one thing: ROI ( return on investment) .
Do you want to understand once and for all how trinidad and tobago email list all this is related? Then, check out what we covered in this article!
What is cost per click?
What is the difference between CPC and PPC?
How to calculate cost per click?
How does CPC work on social media and in Google tools?
What is ideal, maximum, actual and average CPC?
How to start a campaign?
Why Cost Per Click Shouldn't Be Your Primary Metric
In this article, you will learn all the characteristics of cost per click and also understand the reasons why it should not be the only reference in your campaigns. Read on to find out!
What is cost per click?
CPC, or cost per click, is a metric used primarily by online advertising platforms to estimate the cost and performance of paid ads.
It is one of the most popular metrics in Digital Marketing strategies and its success is no coincidence. CPC simply makes your digital advertising efforts totally measurable!
The popularization of the concept took place with Google Adwords (now simply called Google Ads).
When the search engine started using the metric to manage sponsored ads in its search rankings, cost-per-click related articles, studies, and strategies exploded around the world. However, that was just the beginning.
Sponsored banners later gained prominence, followed by monitoring platforms that began to work with generic metrics such as cost per thousand, per acquisition and per lead.
And finally, social networks , which have incorporated all these resources into their own dissemination tools.
What is the difference between CPC and PPC?
CPC, originally cost per click, and PPC, pay per click, are often treated as a single metric.
However, the two terms are a bit different, but they are two sides of the same coin, so in many tools and articles there is usually not much concern about specifying them.
When we talk about a PPC campaign, we mean that the advertiser will be charged based on the accumulated clicks on their ads. The CPC, in turn, is the actual amount that the advertiser will pay for the click on their ad.
PPC, therefore, can be defined as a marketing channel or approach and CPC, a performance metric.
How to calculate cost per click?
Let's say you have an e-commerce business and you want to advertise your products on different websites and blogs across the internet. In this case, tools like Google AdSense can help by making advertising space available on multiple partner sites.
By choosing CPC as a payment option on your advertising platform, you will pay a certain amount for each visitor who reaches your pages from ads spread across the web, that is, through clicks on your banners.
There are other payment options such as CPM (cost per thousand impressions) which only provides compensation after a thousand views, however cost per click stands out for the precision provided in the reports and final adjustments.
The basic formula for CPC is:
CPC = total cost / number of clicks
So, if you provide $1000 for a Google Ads campaign and the CPC value for the chosen keyword is $0.50, in this example, the expected return will therefore be 2000 clicks.
