What is CPC in Digital Marketing: A Step-by-Step Guide

CPC full form in Digital Marketing:

CPC in digital marketing stands for cost-per-click. Cost-Per-Click is a crucial term in Digital Marketing. It determines how much an advertiser pays for each click on their advertisement they place on websites, which is basically based on the number of clicks the ads receives.

Here is the more detail about CPC :-

1. How does the CPC in Digital Marketing actually work :

• Bidding system :

In the bidding system, advertiser bid on a particular keyword. Advertiser may participate in bidding system where they offer the maximum amount they will pay for a click on their ads . This bid depends upon other factors like the quality of ads and the relevancy of ads . When the user search something related to that keyword and if the criteria matches with the searched keyword then the ad will displayed.

• Clicks and charges :

If a user interacts with advertisers ad and click on that ad , then the advertiser should pay the amount they bid for that click. The actual CPC(Cost-Per-Click) depends upon the competition, quality of ads, and other factors.

• Ad Placement :

When a user search for something or the search is relevant and the user visits a website where ads are displayed, the platform determines which ads to display on which position based upon the ads quality, relevancy, bidding amount or interests.

2. Factors that affect CPC :

• Keyword Competition:

Competition on a particular keyword may impact on CPC. Highly searching or competitive keywords have higher CPC, while other keywords like long-tail keywords have lower CPC.

•  Ad Quality and Relevance:

Advertisers who have high-quality and have relevant ads may get the better results from the ad platforms, which directly results to lower CPC and better ad placements.

• Ad placement:

Ads position matter a lot. Ads that are displaying at the top of search results or the ads that are displaying on the first position on websites generally get higher CPCs  because of increased visibility and click rates.

•  Bid amount:

Bid management strategies, including manual bidding, automated bidding, and bid adjustments based on performance metrics, can help optimize CPC and overall campaign ROI.

Cost-Per-Click (CPC) formula in Digital Marketing:

To calculate Cost Per Click (CPC) in digital marketing formula is very simple :

Where:

Total Ad Cost: The total time spent on the advertising campaign.

Total Measured Clicks: The total number of clicks.

For example,

If you spent  RS.1000 on a campaign and it generated 10 clicks, then the CPC is calculated as:

CPC=1000/10

=100

So, the cost per click for this campaign is RS.100

Conclusion

Cost Per Click(CPC) is an important tool for advertisers because  it  basically tells them how much money they spend every time someone clicks on their ads. If you want to run successful online ads,you really need to use CPC.

FAQ

• Difference between CPC and PPC in digital marketing ?

PPC and CPC are the same terms: PPC is basically stands  for pay-per-click used to specify paying per click on an add but CPC stands for cost-per-click used to measure those clicks.

•  Why pay-per-click(PPC) advertising is important ?

PPC advertisements can help brands increase their visibility online in search engines, on social media, and more. Pay-Per-Click can be a cost-effective and fast way for brands to reach a target audience.

• What is the difference between CPC and CPM ?

CPM stands for cost per mille. Cost-Per-Mille is basically based on number of times an ad is viewed by customers, whether customers clicks on ads or not but CPC is cost per click which is based the number of actual clicks the ad receives.