What exactly is a CPCC and how does it help your business grow? Understanding the importance of cpc marketing and integrating it into your online advertising strategy is very important. In order to help you understand cpc meaning and usage, I will break down the key components of cost per click in order that you can optimize it for your business.

What does the acronym cpc mean?

what is cpc

CPC is the acronym for cost-per-click. It is a measure that lets you know how much you are paying for each click in a digital advertising campaign. Including this additional level of detail will allow you to understand more than the cost of the campaign.

What is the meaning of CPC Advertising?

This is a way in which websites charge advertisers in order to benefit from putting their ads on their sites. Google Ads (formerly known as Google AdWords) is the most popular facilitator of this marketing relationship, though there are others.

How to calculate the CPC?

In some cases, you may use an online CPC calculator, but the formula is simple enough. In Google Adwords (or any other third-party advertising platform) you should have your analytics displayed on an admin dashboard. Simply locate the total number of clicks for each advertising campaign.

CPC cost

Take the total cost of the campaign and divide it by the number of actual clicks. That will be your rate for using CPC.

It is possible that someone might use a campaign that costs $1,500 and generates 644 clicks, and that the CPC rate for that campaign is $2.32.

That means that you should not think about the total cost of your advertising campaign, and instead think about how much you are paying to have one click on your landing page from an ad.

Cost of PCC.

PPC, or pay-per-click, is a term that describes the overall advertising payment strategy. When marketers talk about ppc strategies, they usually talk about how much they are paying for their advertising. When advertisers pay for their ads by paying a flat fee, or by paying for the number of impressions (we’ll talk more about that later) or any other payment structure, they pay based on how many clicks that the ads get.

Cost per click is a way for you to see how valuable your PPC strategy is. If a shoe company spends a lot of money on a PPC campaign, it needs to know how much each click ultimately costs them.

Many PPC strategies include a daily budget. So, if there is a $200 budget per day, and if your ad receives enough clicks to make it through the whole budget, that ad will not be shown on that site again until the next day.

Cpc benchmarks for different industries.

The prices of CPC vary widely depending on the industry. Industries that produce high-cost products and have long sales cycles, like SaaS, invest more in advertising, because each time one of their customers spends more money.

Companies that have shorter sales cycles and whose products are cheaper (like personal care or online grocery ordering), want to pay less per click, because each customer spends hundreds of dollars, not thousands.

Here are some of the key cost-per-click industry benchmarks, according to Instapage. This graph shows the average cost of doing business in several industries.

cpc industry benchmarks instapage

Image source: Instapage

The insurance industry has very high CPC rates, but the CPC rate for electronic products was under $1. This makes sense, because an insurance provider wants to build lifelong relationships with businesses and people. So it is important that there are fewer individual customers. That is the case with electronics companies, who are more transactional and who move many pieces of inventory.

The most effective way to determine whether you have a “good” CPC depends on your industry.

PCC vs. CPM

In fact, CPCC is not the only payment structure for advertising. The only alternative to that is cpm, which stands for cost per mille or cost per thousand.

cpm calculation

Image source: ironSource

The advertiser pays a fixed fee for each 1,000 impressions of the ad. That means that for every time that one thousand people see your ad on the internet, you must pay a fee that we have agreed to. CPM is a good choice for brands that are focused on creating brand recognition rather than on quick conversions.

PCC vs. CPA

The other way to calculate the cost and value of a campaign is to use cpa. That stands for cost per action or cost per acquisition.

In this case, the advertiser determines the number of actions that they want people to take (usually, a sale, an opt-in, or a subscription) and pays for the number of actions.

Under this model, advertisers are paid first for the advertising that actually converts, not just for the impressions. The CPa for such services is generally higher because the advertiser is paying for a more valuable action than a simple impression or a click.

How to Optimize CPC in Google AdWords

Because you understand what CPC means, you also need to learn how to use that information in order to achieve a higher Google Ads quality score.

The quality score is the way that Google determines how useful your content is to consumers. Being able to produce high quality content is associated with better ad placement on the web pages, and lower CPC rates.

Google is very skilled at weeding out websites that just try to fake their good ratings. The amount of paid advertising that you spend will never compensate for a website that is poorly designed or an ad that doesn’t answer customer queries.

According to Google, quality score is judged on three categories:

  • I expected that there would be a high clickthrough rate.
  • The landing page experience.
  • Ad relevance to the user.

quality score

Image source: Instapage

In each of the three categories, you and your ads and landing pages are allowed to earn the following scores:

  • Below the average.
  • Average
  • Above Average in the following categories.

All of this information is available to you through the Google Ads Dashboard.

We now know how Google is scoring our campaigns, so we can figure out how to increase the cost per click rate.

All relevant ads.

One of the best and easiest ways to increase your CPC rate is by offering more relevant ads. That means that the ads that you are advertising are in line with the search terms that people are searching for.

By utilizing the following techniques, you can do this:

  • Is it possible to customize ads to target specific search terms?
  • They grouped keywords into themes.
  • Is it possible to more closely align your theme groups to your specific products?

Each ad group should target one search phrase, but you will also benefit from targeting similar searches. On the contrary, “vacation rental in Tampa” and “rental home in Tampa” are two different, but very related searches.

A proper selection of keywords.

If you conduct quality keyword research, you can determine which keywords should be used for your ads and landing pages. It is important to identify long-tail keywords and prioritize local searches to get additional traffic.

Then you must organize the keywords into groups that you can match to the products and services that your business offers. By doing this, you can streamline your cpc advertising strategy, and you can create groups of ads that efficiently match your products to the searches of your consumers.

Adding negative keywords to your sentence.

It is possible that your cost per click will depend on how closely your ads match customers’ searches. A key part of this is making sure that your ads do not match the wrong searches.

negative keywords

Negative keywords are words and phrases that you do not want to include in your ads. These phrases sound very similar to the words you are looking for, but they have different meanings.

What a company advertising the hosting services should not include is the keywords that are related to in-home entertainment – that’s not the kind of hosting we are talking about.

Savvy marketers can become more specific by excluding visitors who aren’t likely to convert. When companies sell high-end workout equipment, they might exclude “beginner workout free” from the list of search terms, because they are targeting only serious exercisers.

Test various bid amounts.

The bidding system on Google Ads is complex, but it is important to remember that the bid amount is not everything.

google bid strategies

Image source: Directive Consulting

Google determines which ads from its advertising pool will be displayed for a given search query, based on the total bids that are put in and the score of the ads.

By doing that, if shoe store x submits the highest bid but has a lousy landing page, it is unlikely that shoe store y will win more auctions than shoe store y with an average bid and a good quality score.

It is a good idea to try different bid amounts in order to ensure that you get the most out of your advertising budget.

This is possible by choosing the manual CPC mode when choosing your bidding strategy. This allows you to change the amount you are willing to spend on each keyword group. The downside is that this requires more hands-on management time.

If you prefer, you may choose to maximize clicks. It is one of Google’s automated bid options. Prioritize that you send as many clicks as possible. It is possible that they may not always be the precise clicks that you are searching for, but it is less hands-on time.

Test your bid strategy and bid amounts and document everything thoroughly. This will enable you to evaluate your current strategy and see if you have a budget allocated to the right search terms.

Do not allow clicks to mean anything if they are not generating sales or subscriptions, or whatever other goals you have. Your traffic will be a lot of dogs that are hunting for collars, but the people who buy these collars will be searching for punk dog collars. When it comes to ads, make sure that the ads you spend are geared towards buyers. Check out how much you can bid on general search terms.

Select from different types of keyword matches.

Additionally, different kinds of keyword matches can all be useful for your campaign. When it comes to keyword matching, you might get the most for your investment. But you should also consider broader search terms. After all, there may be dog owners out there who did not even know that they could buy punk dog collars until they saw your ad.

keyword match types

Image source: StoreGrowers

According to Google Ads, the different types of keyword matches are:

  • Broad match – searches for terms that are related to your keywords.
  • Phrase match – this is what the meaning of the keywords are.
  • Exact Match – Same meaning/intent of your keywords

In some cases, each of these settings returns different types of searchers, and in some cases one isn’t necessarily better than the other. It’s a good idea to focus on a mix of keywords – just make sure that you are not spending the bulk of your budget on keywords, unless your main goal is to get page views.

Conclusion: Improving your CPC Rate

That is the same for any CPC in digital marketing. It is directly tied to how much traffic your site receives. When you know where your advertising budget is going, and you are intentional with your keyword matches, negative matches, and bid strategy, you will be able to fine-tune your campaigns and keep them running smoothly.