#MondayMetric: Cost per click (CPC)

CPC is literally the Total Cost divided by the Total Clicks, usually on an ad, as a piece of content you are paying for, such as Facebook Ads or Google Ads.

The exact cost of each click may vary, so CPC is generally the average spent across the ad group, ad set, campaign etc.

Like most aspects of digital marketing analytics, there isn’t a “best” CPC, it’s about what is “best” for your situation and budget.

From a Google Ads search campaigns perspective, keywords that are more competitive (i.e. more people want to appear in search ads for them) will command a higher CPC, though, over time, a good quality account and campaign can reduce it’s average CPC.

I have seen CPC range anywhere from 1 cent to $50!

This is where it is important to know how much you are willing to spend on a click, based on what it is you are trying to achieve. 

Remember, a click doesn’t necessarily equal a sale, so this is different to Cost Per Acquisition (CPA) or Cost Per Conversion, though these are very useful numbers to know i.e. how much are you willing to spend to acquire a new lead or sale?

And how many people who click end up converting?

If you are selling a low-cost product – say $5 – you’re probably only going to want to spend a few cents per click, and achieve a high quantity of clicks.

A higher cost or consideration product may result in fewer clicks, but a higher CPC.

When running ads, it is important to know:

• What you want to achieve
• How competitive the market is
• How much you are willing to spend (or need to be willing to spend)
• How to best budget your spend, by day or campaign
• What the maximum CPC you are willing to pay is (as this can be set in the campaign)
• That you are targeting the right people (and clicks) who are genuinely interested
• That you are able to accurately track end sales and conversions

Let me know if you have any questions!