What is Cost Per Click?
Cost Per Click (sometimes referred to CPC) is a payment model where advertisers pay every time a user clicks on an ad, regardless of the number of impressions. This payment model is typically used on all major advertising platforms and is preferable to CPM as advertisers can pay for meaningful engagement, as opposed to the number of impressions. Cost Per Click is also often called PPC (Pay Per Click).
With Cost Per Click, it’s important to optimize the sales funnel and understand how the advertising network generates clicks and approaches targeting. Publishers’ main interest is in getting as many clicks as possible, regardless of the source, which is why it’s important to optimize targeting to exclude as many imprecise clicks as possible, and increase the quality of traffic your website is receiving.
With PPC platforms, Cost Per Click is typically calculated through a variety of factors such as ad quality, ad rank, and maximum bids. Cost Per Click is among the most competitive payment models and platforms exactly due to almost guaranteed success. However, average Cost Per Click depends on the industry.
Many advertisers improve ad creative, keyword relevance and landing page quality as a means of lowering their Cost Per Click .
The formula for calculating Cost Per Click is ;
Cost Per Click = Total ad spend / Total measured clicks