Cost Per Click (CPC) Explained

WHAT IS COST PER CLICK (CPC)?

Cost Per Click (CPC) Explained

Cost Per Click (CPC) is a term you may have heard whilst looking at starting a new Adwords campaign or really any form of advertising on the internet. But what is CPC, how is it worked out, how can you find a keyword’s CPC and how this can help you budget your next campaign? In this article, we will be going through all of this to give you a better understanding of this aspect of Pay Per Click (PPC).

What is CPC?

CPC is a form of measuring the cost of advertising. It basically is what it says, the cost you pay per a user clicking on your advert. If you find a keyword (using the tools I’ll mention in a minute) that has a CPC of £5, you’ll pay £5 every time a user clicks on your ad. This might seem pretty crazy, especially when some terms have a CPC of £10. But there are a few methods you can do to have low CPC but still gain a fair bit of traffic.

Page Relevancy & Quality Score

This is a tactic we’ve mentioned quite a lot in our PPC blog topics and it makes your advert content more relevant to the advert and keywords you’re using. Not only will this make your PPC rankings better, but it will also mean your landing page is more likely to convert those customers. I’ve written a whole bunch of article on Quality Score.

How to Work Out Cost Per Click

Cost per click might seem like a pretty complicated algorithm that bids on your behalf to get the correct ranking, however, it’s actually fairly easy to work out. Competitor Ad Ranking / Your Quality Score + 0.1 = actual CPC.

Competitor Ad Ranking

This is a combination of your closest competitors page quality and their budget.

Your Quality Score

We spoke about this earlier, basically relating to how relevant your landing page is towards the keywords advertised on. Google’s adverts work on a bidding system, meaning that Google takes into account your budget when bidding for location. This means that your CPC will only ever be lower or equal to your max bid. Google create your bid by comparing your bid, your closed competitor’s bid and how your pages compare in terms of quality score.

How to Find out CPC

This is actually rather easy. There are a whole bunch of ways to find out the average CPC for keywords, most of these involve some very simple free tools. I’ve spoken about these tools a few times on some of our blogs.

Tools to Find CPC

There are a whole bunch of tools available to find out the average CPC. However, you need to remember this is just an average cost per click, but this should help you understand ROI and budget your adverts better, we’ll get more into that later.

Keywords Everywhere

A very useful tool, Keywords Everywhere is completely free and gives you the ability to find keywords and also find out their CPC. (It does only work on Chrome however). Simply install the add-on and go through the step by step process of installing it. Once it’s on and live, you can simply search into Google and it will display the search volume and the average CPC.

cost per click keywords everywhere

SEMRush

This is another fantastic tool, however, you do have to pay for it. This tool gives you a lot more information than Keywords Everywhere, hence the price. However, once you’ve set up your account, simply type in a keyword, and it will display that term and all the related terms, as well as displaying the CPC.

cpc semrush

Use Cost Per Click For Budgeting

Now that you know exactly how to find your CPC for a whole bunch of keywords, how can you use this to help you run a better PPC campaign? Knowing all the terms that you can use for your campaign and the Cost per click allows you to understand your budget and potential ROI’s. 

  1. Understand your budget: how much do you have available to spend on PPC, how many visitors do you want from this? 
  2. Use your keyword knowledge: you now know all the possible keywords you want to use and the CPC. Use this to work out what terms are out of your budget and ignore them. Then work out what terms you can use, assign a budget and move on. 
  3. Develop the landing page: You can now use these keywords to optimise your landing page. Developing your landing page around these keywords will gain you a better quality score. 
  4. Keep checking and optimising: Once the Campaign is running don’t think it’s over, check how well each ad is doing and what keywords you can use instead. You don’t want to blow a whole days budget in one click if that click doesn’t convert to anything. Work out if you’re looking for quality or quantity. 

(pro tip, advertising on a term which has a volume of 10 searches and spending £1 per click is better than spending £10 per click on a term which has 100 monthly searches if your budget is only £10. Therefore high volume search terms aren’t always the best).

Cost Per Click Conclusion

So there you have it, Cost Per Click explained. If you don’t fancy taking my word for it you can also check it this article ‘Average cost per click (Avg. CPC): definition’ by Google themselves. Rounded up, understanding what a CPC is and how to use it effectively can save you time and money. It can allow you to plan better and develop landing pages better optimised towards conversions. If you’re looking for help on your next PPC campaign get in contact with Channel Creative using the button below. We love what we do and we’re always up for chatting about your digital marketing.