What is CPC? How to optimize cost per click for ad campaigns

CPC is one of the common terms in Marketing Online. Put simply, what is CPC in advertising? It is the metric that shows how much you spend on paid ad campaigns. So what is CPC, how is it calculated, and how do you optimize it? Read on as MONA Media Read on for the details.

Understanding CPC (Cost Per Click)

What is CPC?

CPC stands for Cost Per Click. The basic meaning is that it shows the fee you pay each time a visitor clicks on your published ad. Today CPC is a form of paid media that many businesses and companies prefer for improving conversion performance.

Under this model, the advertiser only pays when a user clicks the ad. In many cases, then, your ad can be shown completely free. If a business wants to optimize its online marketing costs, CPC is a very sensible choice.

Sometimes someone clicks an ad by accident and costs you a fee. Those cases are rare. Basically, people click an ad on purpose only if they are really interested in your product or service. So conversion rate from ad views to orders has strong potential. All in all, it is a genuinely effective marketing option.

What is the difference between CPM and CPC?

Above, MONA explained what the CPC metric is. So how do CPM and CPC differ?.

CPM is short for Cost per 1000 impressions. This term describes what an advertiser pays Google for every 1,000 ad impressions. By contrast, CPC charges only for the clicks customers make, so it makes better use of the ad budget.

CPM gets results fast. It suits brands that are building awareness, promoting their name, or advertising a new product. Its drawback is that you spend a large sum but get less effect than with CPC.

The CPC the amount you pay is proportional to the number of clicks on the ad. With CPM you pay per 1,000 impressions, so you may not get the clicks you hoped for. You might pay for 1,000 impressions and get only 100 to 200 clicks.

⇒ So if you want to focus on target customers who click the ad and go on to buy, choose CPC. Use CPM only when your campaign goal is to raise brand awareness.

The CPC formula

To keep ad costs transparent, you need to know how CPC is calculated and apply it properly. To work out the cost per click, use this formula:

Cost per click = Advertising cost / Number of clicks

In the formula:

• Advertisting cost is the total cost of the ad campaign.
• Number of clicks is the number of clicks on that paid ad. 

Above all, to get the best performance, each business needs to balance its spending against the profit its ads bring in. In every case, keep the average CPC (the average of all the CPCs in the campaign) as low as possible, and do not let it run far above your competitors' bids.

How to calculate the cost per click

Cost per click is the most common way to pay today for CPCads. The website pays only for the clicks customers make. The cost also depends on the bids of competitors who target the same Google Ads keywords during the same period. For sites that already know their target customers, paying per click is a good fit.

What is the average cost per click?

The cost per click depends on your industry, field and bidding package. Ads placed on search pages usually cost more per click. Ads placed on brand websites are offered at a lower cost per click.

What is the maximum cost per click?

The maximum cost per click is the highest amount a bid package will pay for an ad position, and keywords that an advertiser is willing to pay. With a package that allows a maximum cost per click, CPC ads tend to perform better.

What is manual bidding for cost per click?

What is manual CPC bidding? It means you register your ads for each click at a specific amount that you set yourself, without automatic renewal of the ad package. If you want automatic bidding, individuals, brands and businesses must accept enhanced bidding for the cost per click.

What is enhanced bidding for cost per click?

Enhanced bidding for cost per click sets bids automatically across your ad budget packages. Based on these enhanced bids, the total ad budget adjusts bids automatically toward the best level.

Pros and cons of CPC advertising

Advantages of CPC advertising

For the CPC Marketingmodel, the biggest advantage is making the most of the budget you set aside for advertising. That is why so many companies and businesses are interested in this form of advertising.

When you publish an ad, there are usually 2 outcomes:

• Case 1: If users are not interested in or do not need your product or service, they will not click the ad. You pay nothing, which is an advantage of CPC advertising.
• Case 2: If users click the ad, that shows they need the kind of product you advertise. The chance of an order is then very high.

Disadvantages of CPC advertising

So what are the limits of CPC? The most obvious one is that the fee is a little higher. Also, with CPC ads, a business can hardly tell how many people will click in a given period. That makes it hard to prepare for and estimate the cost you will pay.

How can you lower the cost per click?

The CPC metric directly affects your ad budget, because you are charged exactly for each click. The more customers you reach, the higher the CPC price. So you need ways to bring CPC down to the best level.

So how do you optimize CPC costs? Pay attention to the following:

• Focus on ad quality score Relevance score. The scale runs from 1 to 10. A relevance score of 8 or higher means your ad is reaching its target correctly, potential customers. Once your ad has been served about 500 times, you can easily see its relevance score.
• Open Ads Manager to check your ad's quality score. Try several different ads for the same audience to see how they perform.
• Research keywords and make sure you target the right audience to create ad offers that get close to customers and draw potential buyers to convert from CPC ads.
• Track conversions from clicks on CPC to see how well your ads work.

Why choose CPC for your ads?

In ad campaigns, CPC is an important metric for judging how successful and effective the whole campaign is. It gives a business clearer direction when it plans new marketing strategies.

When you optimize CPC costs, your business gets a lot from effective advertising and a sensible budget. Of course, it isn't easy to do this on your own.

If you want to run CPC in your campaigns, especially Google Ads services hay Facebook Ads service provider then MONA Media is a trusted name. With more than 10 years in digital marketing and thousands of clients in every field, including the hardest industries, MONA gives detailed advice and builds an ad strategy plan to optimize your CPC metric so your business gets closer to customers at the lowest cost. That helps your business grow in both revenue and brand standing.

CLICK THE BUTTON BELOW or call HOTLINE 1900 636 648 and let MONA work with your business to grow your profit!

Ways to optimize CPC for your business

It isn't hard to find ways to optimize CPC for your business. Just look at the formula and you can see that the cost of each CPC click depends on 2 main factors: Ad rank and ad quality score.

So MONA gives you 2 ways to lower CPC costs: increase your reach to get more from your ad rank, or raise the quality score of your CPC ads.

Raise your quality score

In the system, when running Google ads, CPC ads with a high quality score get their costs cut automatically. This is a chance for businesses to push their online marketing performance and optimize their budget.

According to Google, for every click on a CPC ad with a quality score above 5, a business gets roughly a 16-50% discount, depending on the industry. On the other hand, if the quality score is below 5, the fee you pay goes up by 25-400%.

To To raise the quality score of your ads, you need to do a few main things:

• Optimize the ad content you publish, and have a suitable landing page for individual users who find you through search.
• Create fresh, original ad content that attracts viewers and raises the click rate.
• Each business needs a set of ad templates with content related to its field, products and services.

Adjust keywords sensibly

The cost per click for keywords differs from industry to industry. The more competitive a keyword, the higher its CPC. If you focus only on keywords with heavy competition and search volume, the budget runs very high. Balance and adjust your keywords, and filter for ones with lower search volume that still bring steady traffic.

Regularly researching keywords, filter keywords and add negative keywords to cut the budget while keeping the useful clicks. Keywords with low competition make for a more reasonable CPC budget.

Remove and prevent fake clicks in CPC ads

Fake clicks is the term for people or bots clicking on ads through hyperlinks in order to deceive Google's algorithms. Sometimes this is done to make Google think there is more traffic so a site ranks higher. In other cases a competitor's click bot clicks your CPC ads to drain your ad budget.

Click bots now account for quite a large share of all traffic. This is a sly form of fraud that has to be stopped to keep ads performing well.

So how do you spot fake clicks?

Fake clicks are easy to recognize in cases like these:

• Invalid clicks are far higher than expected. For example, when you check your account you see only 300 clicks but 1,500 invalid clicks.
• Impressions suddenly jump compared with normal days. An unexplained surge in impressions can come from click bots.
• A run of neighboring IP addresses appears in your IP tracking tools. If the administrator sees many similar addresses, such as 123.4xx, 123.5xx or 123.6xx, there is a 99% chance you are being hit by fake clicks.

Ways to limit fake clicks effectively:

Here are some ways to limit fake clicks and lower CPC ad costs for individuals and businesses:

• Learn about IP blocking tools to block the clickers who make your CPC spike. This does not solve the problem completely, since many tools can fake IP addresses.
• The best way is to run ads optimized for conversions with quality keywords, aimed at your target customers. This raises the conversion rate and cuts down fake clicks at the same time.
• Contact Google Support to block fake clicks. Google will refund you for the invalid clicks.
• Split your ad campaign into different keyword groups. This keeps ads effective and limits which keyword groups can be hit by fake clicks.
• Split the hours your ads run so the CPC budget is not affected much.
• Block IP ranges instead of single IPs. This works well against click bots.

Optimize content and image sizes

Images and article content are the soul of a website and a deciding factor in how well your ad strategy works. Ads only perform well when the site ranks high, gets lots of searches, has a low bounce rate and keeps visitors on the page. To get there, optimize your content and image sizes.

For content, pay attention to the following:

• Make sure the title draws attention, covers the content and contains the main keyword.
• The article should balance H2, H3 and H4 headings to give a clear outline that contains the main keyword, secondary keywords and related keywords.
• Place keywords in the first sentences or in the opening and closing sentences of a paragraph. Keep sentences under 25 words and do not go over this for the 25% article.
• Add long-tail keywords and negative keywords to make the article richer instead of repeating the main keyword too often.
• Keep sentences concise and avoid spelling mistakes and needless repetition.
• The content must be valuable to readers and can be optimized for Google's algorithms.

For image optimization in articles:

• An article should include at least 3 images for every 1,000 words. The longer the article, the more images it needs, to make it richer and describe the content better. Embedding a YouTube video makes it even livelier.
• Make sure the page loads at a steady speed, and optimize image format and size and use keywords in file names before uploading images to the website.
• Images should contain the keyword. Use names without diacritics and with hyphens between words. Do not use strange or special characters in image file names.
• Choose JPG as the image format, with image size between 500px and 700px.

Check your ad block list

Sometimes, to lower CPC bids, people use many actions to block ads. Check whether you have blocked ads unnecessarily, and if so remove the blocks to let your CPC ads run more smoothly.

Use long-tail keywords

Long-tail keywords are now highly valued, and using them sensibly can optimize what users search for. Their search volume is lower, but they avoid the fierce competition of high-volume keywords. Long-tail keywords also have other advantages:

• Low competition means CPC clicks cost less. Shoppers who search long-tail keywords are usually potential customers looking for valuable information, so they convert at a higher rate.
• Google rates long-tail keywords highly for how well they optimize information and suit users. When these keywords get many clicks, Google rates them well and the website can rise in ranking.

Watch the seasons

The smartest way to set bids is to set seasonal bids. Set high CPC bids when you are running ad campaigns or promotions, so you reach your customers well. Automatic bidding can account for seasonality, but it is not as good as researching the market yourself, working out when promotions will happen, and running CPC ads hard at those times.

Pick the right time

You can split your keyword groups when running CPC ads and choose when to run each strategy. The best approach is to choose the golden hours to run ads. This delivers ads to the right potential customers and splits the ad budget into smaller parts, which also guards against click bots better.

Instead of running ads 24 hours a day, pick golden hours such as:

• Morning from 6h30 – 8h30, when customers are free, browsing the web and looking for the things they care about.
• Lunch break from 11h30 – 13h is also a golden hour for internet use, so finding information and converting to purchases goes better.
• The ideal CPC ad window is after 7pm to 10pm. Customers are off work, enjoying their evening, and are more inclined to shop.
• On Saturday and Sunday are the golden times for every kind of ad. This rest period after a hard working week is the ideal moment to convert sales.

≫ Read more: The golden hours for Facebook posts that get many interactions

Adjust your reach

Reach is usually calculated from logged-in users. This tells you where customers are located, so you can see whether your ads are reaching the right place.

To estimate reach, administrators should look at factors such as:

• The number of accounts each customer uses.
• The locations of customers who visit the same ad.
• How long customers stay on the website.
• The number of customers who logged in to the website after clicking an ad.

Increase ad reach

When we create ads, the goal is to attract as many users as possible. An ad that gets a lot of attention does not just help a business sell better but is also rated highly by Google. These CPC marketing ads always have a much lower cost per click. To get there, a business needs to look for new ways of reaching people through related channels.

Widening your reach also helps you avoid fake clicks, which cut marketing performance sharply. The usual causes are users clicking by mistake or bad actors clicking on purpose for profit. Accidental clicks rarely happen, so we only need to guard against the second cause: organizations or individuals who click deliberately.

With techniques to widen, optimize and control the quality of your reach, businesses can reduce this problem to some extent. We also advise against placing CPC ads on small websites with few pages, since their credibility is low and their traffic and reach are very limited.

Things to note when choosing CPC ads

Besides the information MONA has given above about what CPC is, to optimize CPC effectively you also need to keep the following in mind:

• When using CPC ads, individuals and businesses should check their budget regularly. If CPC ad clicks are too high, the budget goes beyond what the business can control. Look into the cause of fake clicks, or choose golden hours to aim at potential and target customers who are more likely to convert.
• Pay attention to CPC bids and use manual bids and automatic bids to suit the season, your business and your promotion periods.
• Regularly keep a checklist, statistics and analysis of your CPC ads, to guide CPC advertising in the next periods.
• If you do not have the experience to research keywords and optimize your website to gain links, traffic and a higher ranking, you can contact an agency to support your CPC ad campaign professionally.

Frequently asked questions about CPC (Cost Per Click)

CPC is an advertising strategy many marketers use. People who are new to it often ask the following questions about CPC.

1. What is the relationship between PPC and CPC?

PPC (Pay-per-click) and CPC (Cost-per-click) are both paid ad formats offered by Google. Both help websites reach millions of different customers in a short time with wide reach.

Both CPC and PPC put the website at the top of Google. This helps promote the brand and products and raises the chance of conversion. PPC suits businesses that want to spread their brand or promote new products and services. CPC ad campaigns suit businesses running seasonal promotions that need to reach exactly the right target customers to raise their conversion rate.

2. Is CPC important in an ad campaign?

CPC is very important in advertising strategy. Used correctly, it brings many benefits such as:

• Good control of the ad budget. It is easy to estimate the money you need for ads and easy to split the budget, keywords and ad hours.
• CPC ads attract potential customers and target people who want to buy, bringing in revenue effectively.

We hope MONA has given you the basic and most useful information about what the CPC metric is and how CPC is calculated. We also hope you now understand how to optimize CPC in your ad campaigns to make them more effective and cheaper, and that you can apply CPC marketing to optimize, improve performance and save ad costs for your business.