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The terms Pay Per Click and Cost Per Click are in some cases used interchangeably. The term cost per click or CPC is a marketing term to indicate your price for every click made to your site from your advertising campaign. To put it another way, in simple terms, you are paying for the attention your advertising gets from possible customers for something that you are offering.
To calculate your average CPC take the amount you are charged by your AdWords campaign and divide this figure by the total number of clicks you received. For example, let’s keep it very simple and say your advertising campaign received 2 clicks, one cost $1.40 and the other cost $1.20, this means your total is $2.60. Now if you divide 2.60 by 2, as this was the total number of clicks you received you get an average CPC of $1.30, which is the actual amount that is charged for every click on your advertising campaign.
Having a high click-through rate (CTR) is really essential and is a vital metric in PPC advertising campaigns. This metric not only tells you how many individuals clicked on your ad after seeing it, but it also helps you evaluate how effective your advertising campaign is. A high click-through rate is a great indicator that the target audience is resonating well with your advertising copy.
This is exactly how the two biggest pay-per-click platforms like Google AdWords and Facebook use click-through rates to determine the quality of your advertisements and how much you are charged. PPC platforms only want to show ads that are relevant to their users and use a bidding system to take into account the quality score when deciding which ads and where to show them.
If you have a high-quality score this will raise your bid and it is easy for you to outrank your competition without outbidding them. What this basically means is that your advertisement will appear in a user’s feed or on the results page, which, in turn, lowers your cost-per-click, enhances your advertisement rank on other marketing channels such as your natural search, CRO, social networks, and e-mail marketing.
Increasing your quality rating even by just a one-point means you will get a much greater advertisement impression share, which might increase by about 6 to 12% on desktop and improves your natural search position. There are numerous methods to increase your click-through rate on your pay per click campaigns to reduce your pay per click expense. The easiest and straightforward way is to guarantee that your advertisement is only being shown to the right individuals.
It all starts with selecting the best keywords and using segmented marketing campaigns customized to your particular audience and the keywords they are looking for.
Importance Of CPC Marketing
By bringing down your cost per click expense actually means you pay less for each click on your advertising campaign, this in turn, cuts down your cost per conversion. Regardless of which PPC platform you use whether it’s Google AdWords, Facebook Ads, Bing Ads or even promoted Twitter tweets, pay per click advertising offers a huge opportunity to small businesses to reach their potential customers quickly and more importantly promote their products and services to them. PPC provides all businesses an opportunity to grow their online business in a profitable way.
CPC marketing, also known as paid search advertising is part of what is known as Search Engine Marketing (SEM), and together with SEO, these are the primary methods where individuals use online search engines such as Google, Yahoo or Bing to discover information or purchase products and services. The biggest advantage for you as a business owner is the fact that you only pay when a person clicks on your ad, so ideally you want as many clicks as possible on the ad as the greater number of clicks means you have more chance of conversions. The reason you are in business is to make a profit and not to lose money.
The only way you can accomplish this is by making sure you select the right keywords and demographic characteristics that allow you to reach your target audience quickly and defining who exactly will see your advertisement. A great tool we use for identifying the best keywords is Jaaxy, read our review of Jaaxy Keyword Research Tool.
Reducing Your Cost Per Click Marketing Cost
By focusing primarily on your bid strategies, landing pages, and keywords you put yourself in a position of running profitable CPC campaigns.
Automatic CPC Bidding OR Manual CPC Bidding
In our opinion, the easier option is to change to Automatic Bidding also known as Maximize Clicks. You just set your maximum budget for each day and then let Google handle your campaign. You will find this will lower your cost per click substantially and that you don’t need to constantly monitor the bids and make changes, which means you have more time to focus on other techniques to grow your business.
Manual bidding can be achieved in the following ways:
- From your advertising campaigns so far identify the average cost of CPC
- Begin with a low cost per click by picking a default bid that is close to your favored cost
- Recognize which keywords create the most sales (ideally long-tail keywords) and increase their bid to enhance their advertisement position and produce more sales
- Reduce the bids on your less active keywords
- Change bids based on areas that bring quality traffic, devices that perform much better, also take into account the time of the day when you make the higher conversions
- Evaluate the significance of your landing pages by making sure that they have page titles, clear descriptions, headings and content that’s pertinent to your advertisements and keywords message. In addition, produce various landing pages for various products that reroute users to the specific page dedicated to the product promoted in the advertisement
- Evaluate your advertisement copy and use ad extensions properly. Use urgency in your ad copy by using flash sales or limited-time-only discount rates, and remember to state precisely when such deals and marked down sales are ending.
- Use various advertisement extensions such as CTA buttons that allow you to put your telephone number, your seller ratings, a location map with your advertisement, and so on.
- Remember to set up conversion tracking for things such as site purchases, calls, app downloads, newsletter sign-ups, and so on. Conversion tracking will save you time and help you track multiple kinds of conversions at the same time, also they will help you determine the effectiveness of your ad clicks and whether these ads clicks lead to any important customer activity.
Get more information on Automatic CPC Bidding And Manual CPC Bidding
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