CPC or Cost per Click is an online advertising billing method in which the advertiser pays for each click that their ads receive on a specific website (the advertising space provider) that shows them to its visitors through a text link, video or banner. A perfect example of advertising networks that use this method are: AdSense and Google AdWords.
What is CPC? What is its function? How can you apply it to your marketing strategy? We will explain it below.
Meaning of CPC
The technical language of digital marketing tends to use a lot of anglicisms and acronyms whose meaning is unknown to those who do not have experience in the world of marketing. CPC is one of the most common terms when we talk about advertising on the Internet.
CPC, acronym that corresponds to the online advertising method known as Cost per Click. In English it is also known as Pay Per Click or PPC, which in Spanish means Payment per Click.
The origin of this payment method is attributed to a cash app database made by Jeffrey Brewer on behalf of the company Goto.com (later Overture and currently part of Yahoo ), in one of the famous TED talks (Technology, Entertainment, Design) in February 1998.
But CPC is not the only method of payment for advertising on the Internet that exists. There is also CPM (Cost per thousand or payment for every thousand clicks given to an advertisement), CPA (Cost per action, it is not enough just to click, the objective is that the user performs an action; example: download a guide) and a less used one, the one-time payment (fixed payment for an advertisement that is usually very cheap).
What is CPC for?
CPC serves to generate assets or profits for both the advertiser and the owner of the advertising space. The latter receives payment for each click made on the advertisement published on their website. For their part, the advertiser expands their possibilities of selling their products and services by displaying them on different digital platforms.
How CPC works
The basic operation of CPC is that, for each click made by users on an advertisement, the website in charge of the advertising receives a payment or commission set, in general, by the advertiser.
The advertiser not only sets the costs, but can also set the parameters under which their advertisements will be made (in the case of Google AdWords ). That is: the website where the advertisement will be placed, the material to be published, the volume of the campaign (whether there will be many or few advertisements) and as for the costs, these depend on the quality of the page offering it. If it has a large number of subscribers and visits, the price per advertisement is higher.
How to apply CPC to your marketing strategy
CPC has become one of the most widely used digital ad buying systems today. Basically, it is because it is relatively easy to use and because the costs do not depend on whether the user buys or hires the product-service, but simply clicks on the ad (even if they do not buy the product). In short, you pay not for the end customer but for the potential customer.
On social networks such as LinkedIn Ads, Twitter Ads, Bing Ads or Facebook Ads, CPC has become very popular. It allows you to create series of ads that offer certain products and services; then the cost per click is established and the advertiser charges for each interaction made by users.
However, for a CPC-based marketing campaign to be successful, it is essential that quality prevails. Hence the importance of taking into account the following aspects:
It is important to have real metrics on the number of visits that the website generally receives. This makes it easier to set costs.
Make appropriate use of the keywords associated with the ads, since these must be completely related to the product or service offered.
Check what search engines are reporting for the keywords you want to use. This will help you determine users' search behavior.
Create ad series by theme; this is an interesting tactic, since by creating thematic lists of keywords and ad groups, Google gives them more relevance, thus generating a high-quality campaign.
When it comes to optimizing CPC, CTAs can be used to invite users to take action.
Finally, it is not so much the number of clicks received that should be of concern, but rather the origin of these clicks. If the statistics show that these clicks come from the Google search engine and not merely from a banner campaign, this is an indication that the user could become a customer, because they searched for information related to the campaign themselves.
CPC Example
A company selling white goods advertises its products through a CPC-based marketing strategy. The advertisement has been viewed 1,000 times and the company's web platform has received 50 visits as a result of the advertisement. If the cost per click is €0.25, for every 50 clicks received the total will be: €12.5.