What is CPC (Cost per Click)?
CPC or Cost per click is one of the many metrics that Google AdWords and other advertisement platforms use to calculate the efficiency of your ad campaign.
It’s called a cost per click because it’s the cost you pay each time someone clicks on your ad.
And CPC is the amount that a website publisher gets when a paid ad on the site is clicked.
It’s important to track CPC while running PPC or social media campaigns to optimize the campaigns for maximum possible reach in a given budget.
The lower the CPC number, the more cost-effective your ad campaign is.
How to Calculate CPC?
The formula of CPC (cost per click) is based on the total cost and the number of clicks received.
The formula of CPC is:
CPC = Total cost of ads / Total number of clicks
You can also use our cost-per-click calculator for calculating your CPC when running ads. Simply enter the total cost, the number of clicks, and you will get the CPC number instantly.
Let’s say you’re managing a campaign where you pay a total of $1,000 and receive 50 clicks on your ad.
Then, the cost per click (CPC) of your campaign will be $20.
CPC = $1,000 / 50 = $20
This means you’re paying $50 per click on your ad.
Why is CPC Important?
The cost per click (CPC) is an important budget allocation metric that helps you understand how effectively your Pay-Per-Click (PPC) campaign is doing.
CPC can be used to measure the ROI of advertising campaigns as well as to measure performance changes in terms of sales or revenue generated.
CPC also helps track this data over time by comparing current spending with changes in revenue and profit.
You can also use CPC while researching keywords for your campaigns to decide which keywords fit your advertising budget.
CPC is also a good metric to consider while keyword research for SEO as a higher CPC means advertisers are willing to pay more for each ad click from a keyword.
Tools like Ahrefs or Google Keyword Planner can show you the data of the average CPC of keywords.
This is a good way to sort the keywords based on the metrics like CPC, search volume, and keyword difficulty.
What is the Average CPC?
CPC varies a lot based on the industry.
According to the latest WordStream data, the average CPC for legal is the highest at over %6, and the lowest CPC is at $1.16 for E-commerce.
This is the average CPC of Google search ads and display network ads across all the industries.
|Industry||Average CPC (Search Ads)||Average CPC (Display Ads)|
|Dating & Personals||$2.78||$1.49|
|Finance & Insurance||$3.44||$0.86|
|Health & Medical||$2.62||$0.63|
|Travel & Hospitality||$1.53||$0.44|
How to Improve Your CPC
You can get a high CPC because of many reasons, like if you’re offering users something they do not see elsewhere. Or maybe your ad copy isn’t compelling enough, or because of an ad network’s technical implementation, it could be blocking some of the best conversion attempts.
Most of these things can be fixed fast, so here are a few tips you can use to maximize your CPC to get the most from your campaigns.
1. Raise the Profits per Conversion
The best way to get the most from your CPC is to increase the ROI per click.
You can do this by increasing your charges for a service or product, and that will increase your profit per click.
So if you get a profit of $250 per click, where CPC is $50, you get five times your spendings.
To bring the overall CPC down, you can try to increase the revenue you get per click, so if you can increase the revenue per click to $350 from $250, you will get an effective ROI of 7 times.
2. Automated Campaigns
One of the most powerful ways to improve your click-through rate is to automate ad campaigns (like Google Adwords).
Automating ad buys gives you a higher chance of getting more customers who cost less and also gives you more control over how your budget is being used.
3. Improving your Quality Score
According to Google, “the Quality Score is an estimate of the quality of your ads, keywords, and landing pages. Higher quality ads can lead to lower prices and better ad positions.”
The Quality Score is represented on a 1-10 scale and displays expected clickthrough rate, ad relevance, and landing page experience.
Now to improve your Quality Score, you can make your ad more relevant to the user. Avoid broad keywords and use a targeted keywords list as much as possible.
Bidding on long-tail keywords and directing the users to a better landing page will help increase the Quality Score, which will then lower the CPC of the campaign.
How do you calculate CPC?
You can calculate the CPC by dividing the total cost of ads by the total number of clicks.
What should my CPC be?
The average CPC (cost per click) in Google AdWords is $2.69 for search across all industries.
How do you know if an ad campaign is profitable?
You can use the CPC (cost per click) data to quickly see how much your ads cost you and your campaign’s return on investment. This will show you your campaign’s profit margins.