What is Cost-per-click (CPC) and what does it mean in AdWords reports? The easiest way to define CPC is the number that represents the cost for the advertiser every time someone or something clicks on the ad. Typically any Paid Search Strategy will have a target CPC in mind before a new campaign starts to run. Depending on industry type, competitiveness, technical optimization and quality score the cost of running PPC campaigns can get expensive.
Other factors in the bidding process include the audience that you are trying to target, the services or product being advertised, and the selected bidding strategy. Typically when you allow Google to bid for you without human supervision there is bound to be an expensive mistake somewhere during the campaign. For most e-commerce businesses paying 20% to acquire a new customer is an acceptable range for spending.
Average cost-per-click (avg. CPC) is calculated by dividing the total cost of your clicks by the total number of clicks, depending on the bidding strategy. If you choose to pay for conversions rather than clicks, you will not be charged for impressions and be charged at the target cost per acquisition set. For example, if your target cost per acquisition is $10 and you get 10 conversions you would be billed a total of $100. Clicks or impressions that did not result in conversions would not be charged. In the case of this bidding strategy, the total ad spend would be $100 with an average CPC of $10.
Each strategy has drawbacks and benefits. For more information consult with our team or check our local CPC analysis for a city near you.