The Basics of Cost Per Click
Get To Know the Basics of Cost per Click (CPC) Metric for Search Advertising
Cost per click is a defining metric for all online advertising which defines the amount spent on average to drive a click. Below is a guide to learning about cost per click (CPC) for search advertising.
How To Find Your Cost Per Click (CPC)
The cost per click formula is simple and is the name sake. An advertiser can define the cost per click for a certain advertisement or campaign by dividing the amount of clicks from the cost spent with the associated dimension.
CPC = Cost / Clicks
How to Find Cost
For search advertisers using Google Ads or Microsoft Ads the struggle to find cost is not really there. It is easy to find your associated cost with a dimension or the account overall by using the views in the user interface (UI).
What is a good cost per click (CPC)
Cost per click (CPC) can be determined as good or bad by reviewing a number or differing dimensions such as platform, audience, keywords, and relevancy to the advertised business. The more relevant your targeting is to the brand, product, or services being advertised, the lower the cost is to advertise on the Google Ads and Microsoft Ads platforms.
How Can I determine The Relevancy of My Targeting
Google and Microsoft provide Quality Score metrics to their search advertisers as a metric to determine the relevancy of your targeting to your offering which is based on the landing page you’re sending traffic to. A good rule of thumb is to review Quality Score and if the metric is below 3 then the relevancy of your advertisement is not good. For competitor conquesting campaigns, the Quality Score metric will be at 3 or below but should not be a determining factor into the success of the campaign.
Finding Cost Per Click (CPC) Benchmarks
Using benchmark data is a good way to start to analyze if the cost you are paying to drive clicks is either above or below the marketplace. There are multiple sources which publish CPC benchmarking data which can always be found on trusted publications such as Search Engine Land.
Creating Your Own Cost Per Click (CPC) Benchmarks
It is recommended once your search advertising accounts gather enough data over a 3 to 6-month basis that you should start creating your own benchmarks. Creation of an internal benchmarks allows the advertiser to continually judge the performance of an advertisement or campaign based on historical data.
Is your cost per click rising?
To have your account reviewed and click through rate analyzed contact us today for a free, zero-commitment Google Ads audit and analysis.