Cost per click is the actual price paid for every click in the PPC (pay per click) marketing campaigns. When your PPC ads get a click, it is a representation of an interaction or a visit with the company’s service or product offering. Each click on the campaign is a representation of attention from someone who is looking for something that you have on offer. This attention has to be bought by advertisers. For this reason, you need to note some of these factors below:
1. What kind of attention do you want?
2. How much are you willing to pay for that attention?
The CPC formula
For an advertiser, the cost per click is always equal or less than the maximum bid that is made. This is because it is the average of the bids placed against different competitors over a certain time. Due to how the Google AdWords usually works, the actual CPC is influenced largely by you and the rank of your closest competitor.
The average CPC in AdWords
Usually, the average CPC depends on a number of factors. In most cases, it is determined by the business type as well as the industry that you are operating in. In most cases; however, the average cost is around 2 dollars. There are different average cost per click benchmarks for different industries for display on AdWords and search. It is important to find out how much other people within your industry are paying for their clicks so that you can evaluate whether it is cost effective for you or not.
By checking your costs against others, you will be able to determine the benchmarks and whether you are higher or lower than them. If you realize that you are higher than the set benchmarks, it may mean that you are actually paying too much. There are many tools that can help you make this determination and make it well.
Why you should include CPC in your search advertising
Cost per click is very important because it is a number that determines your financial success in relation to the paid search engine campaigns. It also determines how much you will pay for AdWords. The ROI, regardless of whether you underpay or overpay for the action is usually determined by the amount you are currently paying for your clicks and the kind of quality that you get for that particular investment.
The ROI on overall is usually determined by the amount of money paid for the clicks you get. It is also determined by the traffic quality that such clicks are actually bringing to the table. It is of utmost importance to think of the cost per click based on the value brought in and the cost of getting them in the first place. By considering all things, you should be able to identify the kind of clicks that are valuable and inexpensive. It is these kinds of things that you should concentrate on.
Maintaining value, but lowering the CPC
So, is it possible to lower the CPC but still be able to sustain the visitor value? It is important to try to improve too, as you gain more ground. The ROI should be constantly growing. If you want to maintain value, but lower the CPC, then there are some paths that have to come into play.
The first thing to do is to raise the quality score. The search engine Google has come up with a system that is automated and it offers some pricing discounts to PPC campaigns that are well managed with very high scores. The current average score stands at five. Usually, the accounts that have a score of six or even higher are given a CPC decrease of between 16-50 percent. Accounts with a score of four and below get the CPC increased by 25-400 percent.
This means that a higher quality score translates to a lower CPC and a lower CPA.
How to get discounted rates?
You should try as much as possible to boost any chances of getting a discounted CPC rate by simply adhering to the best practices. These best practices include:
• Increasing your CTR or click-through rates by coming up with compelling and most relevant ads
• Build out ad groups that are closely related
• Optimize the landing pages and ad text that are capable of speaking to the search intent of any individual
Expand reach: by discovering the most relevant, valuable, and new clicks, your budget distribution will be greatly improved. To do this successfully, it is important to find some new keywords for PPC. You also need to search all the advertising opportunities that are available. However, you need to note that you cannot simply expand without paring back. It is important to eliminate all overpriced or irrelevant clicks from the campaign simultaneously.
Refine the reach: by designating negative keywords continually in the AdWords, account allows you to control the average CPC. This is done by filtering the traffic from searchers who are not likely to convert. When you are adding the new keywords to the AdWords account, you should ensure that you eliminate all losers. By targeting the keywords that are able to perform well and those that are most relevant to the business, you ensure that:
• The money spent is protected: lowering the CPC does not make any sense if you are still paying those low prices for clicks that are not relevant. By using negative keywords, you communicate to the PPC campaigns about the terms that should not be targeted. This means that the budget is reserved for the terms that are relevant only.
• The quality score ends up improving: when the keywords are related to the ad text, offering, and pages, then the CTR and all other factors related to the quality scores are affected positively. This means you get clicks that are more cost efficient and search terms that have a better conversion rate.
A low CPC is important to the success of PPC. This is because it ends up translating the cost per conversion.
Category: online marketing
Keywords: AdWords, cost per click, pay per click
Tags: online marketing, advertising, cost per click