CPC (Cost Per Click)is a pricing model used in digital marketing where advertisers pay a fixed sum each time a user clicks on one of their ads. CPC is a common way to buy advertising, especially in the context of search engine advertising (such as Google Ads).
For advertising platforms such as Facebook that use the cost-per-exposure pricing model, CPC is used as a metric to get a better view of the cost.
Key aspects of CPC:
Bidding: In many advertising platforms, CPC is determined by a bidding system where advertisers compete for ad space. Advertisers set a maximum bid on how much they are willing to pay per click. Actual CPC may be lower than the maximum bid, depending on competition and other factors.
Quality factor: For example, in Google Ads, CPC is also affected by the quality of the ad. Google assesses ad relevance, landing page, and user experience to calculate a quality factor. A high quality factor can reduce the cost per click.
Conversion rate: Advertisers should monitor their conversion rate (the number of conversions divided by the number of clicks) to ensure that their ads are effective. A high CPC may be acceptable if the conversion rate is also high, meaning that the clicks lead to desired actions such as purchases or registrations.
