The question about what exactly Cost Per Click (CPC) is a prominent one today, and as you may well have experienced it has burnt the fingers of those Google Ads marketing agencies who couldn’t answer this question. As experts in search engine marketing services, Starbright is here to help you make sense of CPC.
The starting point: PPC
Where many Google Ads marketing agencies go wrong in their explanation is by jumping straight into CPC. The actual starting point is PPC marketing, which stands for Pay Per Click marketing.
This involves making use of a type of marketing where you place an advert on the internet, through Google Ads, so that it can come up on related searches. But you haven’t paid anything yet. You only pay a fee for your ad once a user clicks on it (hence, Pay Per Click). So every time your ad gets a click you pay a predetermined amount.
The amount you pay: CPC
Now that you know you are paying only for the clicks on your ad, you’ll want to know how much you are paying. That amount is your Cost Per Click.
Your ‘actual CPC’, the final amount you pay for a click, is calculated according to your AdRank, Quality Score and maximum bid. Don’t worry, though, your CPC should always be lower than or equal to your maximum bid, so you can set the limit for what you are willing to pay per click.
An interesting fact: Average CPC depends on the industry
While Google advertising agencies might tell you all about average CPC to justify what your ads are costing you, many of them don’t put this into context, leaving clients confused. To help you understand the differences between various industries, have a look at this article from WordStream.
As you can see from the WordStream data, the legal and consumer services industries have a much higher average CPC than, say E-commerce or travel and hospitality. This could be for numerous reasons such as greater demand for better services in those industries.
If you are finding that your ads are costing almost nothing and not bringing in leads, this could mean that you are either bidding too low or your ad quality is low. If you are way under the average CPC though, maybe consider adding to your budget a little to see what effect this can have.
Still have questions?
While this article is meant to inform, it is true that search engine marketing services are a specialised field, so it’s natural for you as a customer to have more questions. Contact us and our Google Ads specialists will answer your questions and put your mind at ease.