What is CPC?
CPC stands for cost per click and is the amount you pay for each time someone clicks on an advertisement. A CPC bid can be considered an average of how much you are willing to pay per click on your ad.
You can calculate the CPC as follows:
CPC = total ad Cost / total clicks
Example: Let’s say the total ad cost is $5.00, and you received 100 clicks on your ad. Your CPC will be $0,05 (5 cents)
Why is it an important metric to know?
For a business owner or marketer, it’s good to know what you are paying per click. Because this can indicate that an ad creative or targeting is effective or maybe you’re paying too much for your ads. This is important for optimizing the conversion path because if one of the steps isn’t up to par, it will reflect on your overall performance.
For instance, when you’re running an A/B test between two ads. If ad A gets more clicks than ad B, it means that ad A is more effective. I mean, a lower CPC means more traffic for the same amount of money.
The chances are good that ad A is more relevant to the user than ad B because it catches the eye better and/or has a stronger call-to-action. If this is true, you can assume that ad A will have a higher conversion rate than ad B if all things remain equal.
What factors affect a high CPC?
Several factors can affect CPC. You can find examples of these in the next section.
Factors affecting a high cost per click:
1) High Competition
Competition is one of the most significant factors that can affect CPC. The more relevant and targeted the audience is, the higher you’ll have to bid to win a high rank in Google ads. This doesn’t mean you should lower your bids because it will only result in a low CTR (click-through rate). An ad with a lower CTR will get fewer clicks than an ad with a higher CTR.Competition is one of the most significant factors that can affect CPC. #cpc Click To Tweet
2) Google Quality Score
The Quality Score is an essential factor when it comes to bidding for Google ads. The higher your Quality Scores are, the more likely you’ll be able to keep a lower CPC. Google uses different metrics like CTR, Landing Page quality, and relevance to determine your score.
3) Facebook ad relevance score
Just like the Google Quality score, Facebook also has an ad relevance score. This is to help determine whether or not an ad is compelling and relevant for its audience. The higher your ad relevance score, the less you’ll have to bid per click to win a high rank in the newsfeed.
4) Your Ad Creative is not standing out.
This is one of the biggest reasons why CPCs are high. After all, you want to make sure people notice your ad. If your ad isn’t standing out enough, you will have a low CTR, and then you end up paying a high price for that click.If your ad isn't standing out enough, you will have a low CTR, and then you end up paying a high price for that click. #CPC Click To Tweet
How to improve your CPC?
There are a few ways that you can optimize your ads at this point. You can experiment with the ad creative, change the targeting and try out different ad networks to get lower CPCs.
1) Change your ad creative
Your ad creative can have a significant influence on how many people will click on it. If you’re running the same ads over and over again, the chances are good that not enough people are seeing them. You might have to change up the copy to get more attention or try out different images. Just remember to keep testing and track the results of your experiment.
2) Change your targeting
After you’ve changed up your creativity, it’s time to change your targeting. You can improve this by looking at different audiences, such as demographics or interests. You might find that a particular audience has a higher CTR than others, so you will have to bid less for this audience to get more traffic.
3) Try out different networks
Another option is to try out different ad networks. You can do this by narrowing down your previous campaigns and making an ad campaign specifically for these new ads networks. This might help you get more traffic at a lower CPC because there is usually lower competition in less-known ad networks.
5) Target location
Different locations have different CPCs. You can quickly improve your CPC by just targeting a specific region. If you’re an eCommerce business, this is especially helpful because people are more likely to buy in their own country rather than in another country where they have to pay international shipping fees, among other things.
6) Use a Bidding tool
There are bidding tools that help you make the right decision based on your budget and bids. You can set up automatic bid adjustments or use bid assistance from this program to make sure you get the most out of your ads. Remember, acquiring traffic is great, but it’s a waste of money if they’re not interested.Remember, acquiring cheap traffic is great, but it's a waste of money if they're not interested. #CPC Click To Tweet
7) Lower your bids
Bidding is the way you indicate to Google how much you are willing to pay per click. If no advertisers bid for a keyword, it will earn the highest quality score and thus have the lowest possible CPC. So if you can afford lower bids and still get great results, go ahead and try it!
There are many reasons why you might have to pay a high price for your ad clicks, but there are also different ways to improve your CPC. Experiment with the ads, the targeting, and the ad networks to get more traffic at a lower cost.
If your goal is to use Facebook advertising as part of your overall marketing strategy, get a better understanding of how Facebook advertising works and improve your next campaign by checking out our other blog posts about Facebook ads.