Cost per Click, or CPC, measures the cost per mouse click. The cost of a keyword will fluctuate based on competition and fluctuations in search volumes. Cost per click is the quickest way to make money on your website when you have traffic.
Quality score is another crucial factor in CPC. I’ll talk more in detail about this in a moment. It’s only one aspect of PPC (Pay Per Click) advertising.
You can sometimes use CPC to refer to PPC advertising in its entirety. This is because “cost per view advertising” relies on a set fee for each viewer that clicks on the ad. Technically it’s a synecdoche.
The cost per click helps you balance the relative value of getting those clicks. This can be useful when you decide on which terms you want to bid on or when you calculate your ROI once a campaign is underway.
How the PPC Bidding System Works
You can organize PPC campaigns around Ad groups. This is a collection of ads that all serve the same set of keywords.
The ad groups are not the only elements of a campaign. A campaign also includes the keyword list as well as the landing page. Each component of a campaign can have optimizations to improve conversions.
One advertiser might run several campaigns simultaneously, depending on the size and needs of the company.
You have most PPC ads delivered via a bidding process. These include the Paid Results you see at the top of Google search engine result pages (SERPs) and some Google Display Network ads.
Advertisers must bid on terms that they believe are attractive and relevant to their business. While popular search terms are more expensive, less desirable terms are often cheaper.
Successful campaigns will balance CPC with expected revenue and potential. This system allows advertisers to reach searchers at a price that suits their budget.
Cost Per Click – Quality over Quantity
You might think that it comes down to money. Google always places quality over quantity when determining search results. Google Ads selects which PPC ads to show based on bids and who it believes is best suited for the searcher.
Search engines select ads when a user performs a search. Their AdRank determines this.
It’s a combination of their CPC bidding amounts and the quality, relevance, and their target keywords or campaigns (“Quality score”).
The quality score includes click-through rate and the relevancy of each keyword in an ad group. It also considers the quality of landing pages, the relevance of ad text, and historical Ad account performance.
You can calculate QS dynamically, so you will see it when planning and implementing your campaign.
This incentive system motivates advertisers not to trick people into clicking. Providing valuable content through PPC ads provides better ROI (Return On Investment) in two ways: First, Ads charges you less for ad clicks if you create relevant, intelligently-targeted campaigns that are useful and satisfying to users.
Second, valuable content with a consistent message from the keyword groups to the ad copy and landing pages will increase conversions and bring in more revenue.
How the Digital Marketing Channel Works
The digital marketing channel of pay-per-click (PPC) is complex. Digital marketers have an excellent opportunity to grow their traffic and improve conversion metrics. Pay-per-click is a risky strategy that can lead to major headaches.
Here are the most FAQ (frequently asked questions) about PPC marketing to help explain it better:
- PPC Advertising: Should My Business Use It?
- What are the Major PPC Platforms?
- What is PPC Marketing?
Let’s start at the top!
PPC Advertising: Should My Business Use It?
Consider PPC advertising if you have a website. Remember that the keyword here is “consider.” Never do PPC just because your website is online.
Before beginning your first PPC campaign, think about your budget, advertising goals, and risk tolerance.
Have you set a clear goal for conversion? PPC advertising can be more effective if you match dollars spent with a conversion, such as sales or lead completion. Clear goals will help you achieve that.
What are your goals? PPC works well for fast, flexible advertising. PPC stops producing if you stop spending. Search engine optimization can help you balance earned media with PPC.
How much money can you spend on PPC before getting a return on your investment? PPC ads don’t deliver instant results. Spend some money to get something in return. It could be $70 or $70,000. You can keep a number in your head.
It doesn’t mean you have to know the answer to all these questions. Before you dive in, however, you must think about them.
PPC (pay per click) and CPC (cost per click)
are two of the most common terms you’ll likely to have come across.
While quick answers are satisfactory, it is better to understand the terms and how they relate to each other. It also helps to know what each term does and doesn’t do.
What PPC is and isn’t
Pay per Click (or simply PPC) is advertising that charges advertisers for each click on an ad. Sometimes, this can be a fixed amount, but it is with a fixed daily budget.
However, the value of each click varies depending on factors such as competition and search volume.
The Alternative: Impressions
You can pay for “impressions,” instead of paying per click. You can also see impressions as views.
You can use CPM or cost per 1000 impressions to measure impressions. This is the system that operates in most Google Display Network ads. Clicks have a more significant benefit than impressions.
Impressions don’t depend on any action. With PPC, clicks count as clicks. Your ultimate goal is a conversion, like a purchase or a form submission. But at least this gets you started.
Search engines are the most commonly used form of PPC. Platforms such as Google Ads and Bing Ads enable advertisers to bid for relevant and valuable keywords to their businesses and customers’ pain points. Winners’ ads then appear in search results alongside the winning keywords.
Individual websites or groups may also host PPC display ads and banner ads. These ads are usually hosted through an intermediary like Google AdSense.
Website owners interested in ad revenue can request Google to place ads on their website in return for a part of the PPC costs.
Their interest is to get more traffic and more clicks on ads. However, the intermediary is responsible for handling the money and arbitrating the ad content.
Although website owners may work directly with advertisers, these companies usually charge a flat rate per click and do not use the bidding system.
What are the Major PPC Platforms?
While there are many platforms offering text, display, or shopping PPC ad placement, there are three main platforms that you shouldn’t overlook:
- Google Ads
Google Ads is Google’s principal PPC advertising platform. Google offers pay-per-click advertising on its Search Network, search partner sites, and image and video advertisement on its Display Network. Google Ads allows you to advertise on YouTube.
- Microsoft Advertising
Microsoft Advertising (formerly Bing Ads) is Microsoft’s PPC advertisement platform. The platform permits pay-per-click advertising on its Search Network, including Yahoo.com and search partner websites.
Native advertising also features on Microsoft-owned web properties such as MSN.
- Amazon Advertising
Amazon accounts for more than 46% of all product-focused searches and you can also become an affiliate.
Amazon Advertising is the fastest-growing PPC platform for eCommerce retailers. Amazon gives advertisers can create display- or shopping-focused campaigns to promote their products through Amazon’s shopping network.
What is PPC (Pay Per Click) Marketing?
Pay-per-click marketing is an advertising channel that doesn’t charge by impressions or solely for ad placement. The bid amount may affect placement, but advertisers get paid only when an online user clicks their ads.
PPC ads appear on search results pages, such as Google or Bing. Advertisers can place their brand, products, or services front and center by creating an ad that targets specific keywords or behaviors.
What does a PPC ad look like?
PPC ads most often appear in search engine results. But not all! There are three main types of pay-per-click advertising.
- Text Ads
Text ads consist of written copy the advertiser provides. Format and character limits depend on the PPC platform. The Search Network is the most common way to trigger text ads. Users search Google and Bing for a keyword within your PPC campaigns.
- Display Ads
Display advertising is delivered in the form of an image or motion graphic. PPC platforms that allow display advertising have specific content and size requirements that advertisers must follow when creating visual creativity.
Display ads appear on most websites and are therefore available for advertising placement. The advertiser’s target audience visits the websites where the ads are contextually placed.
- Shopping Ads
Shopping ads are typically sent after a searcher has submitted a query to a search engine. A shopping ad typically includes an image of a product, its price, and any relevant specifications such as size, color, dimensions, etc.
As you can see, PPC comes in all shapes and sizes and you have quite a choice of ways to pay for customers to see your product and choose to buy.
In recent years, Google has begun to put a lot of value on quality content that meets the needs of the reader and therefore a lot of website businesses are focusing on good website SEO to get the best ranking on page one of Google.
PPC is a way of paying to bring more traffic but just as effective is excellent SEO to bring organic traffic, if your budget doesn’t run to paying yet.
Learn more about growing a website business and start for free today.
I hope this article has helped you to understand PPC (Pay Per Click) and the corresponding term of CPC (Cost Per Click) and how it will affect your business.
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2 thoughts on “What is Cost Per Click and PPC?”
Hey there, it’s always nice coming across your articles. As an amateur in this field, I really like learning new things in the field. I know about cost per click and pay per click, but you really made me understand so much more and it was also a pleasure knowing how the PPC bidding system works. I really appreciate this and also hope to see more of your articles
That is excellent to know. Once you have a good understanding of how the online system works you will be able to build a successful business.