What Is CPC?

Google Ads Marketing Agency ready to answer all your questions

A question that comes up a lot in our Google Ads training course is “What is Cost Per Click (CPC)?”. We decided to put together a few points to help you understand CPC.  

The Starting Point: PPC

The 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 each click on your ad, you’ll want to know how much you are paying. That amount is your Cost Per Click.

The final amount you pay for a click is calculated according to your AdRank, Quality Score and maximum bid.

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 Ads agencies might explain average CPC to justify what ads are costing, 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.