What is CPC or price per click? Why is it important in advertising?

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CPC stands for cost per click, which is the amount a publisher earns each time a user clicks on a display ad unit containing their publisher ID. From an advertiser’s point of view, CPC is the amount AdSense pays the publisher for one click.

An advertiser’s CPC model is also referred to as Pay Per Click (Pay Per Click).PPC) since payment is settled on a per click basis, which is how much the advertiser pays for each click.

PPC is the popular advertising form which has many formats like CPC, CPM, CPA and others.

How does CPC work?

Cost Per Click (CPC) is the term that associates the advertiser with the publisher and any third party intermediaries such as Google. The popular Google Ads advertising platform uses the CPC (price-per-click) model as one of the methods of presenting the advertising market to advertisers.

Google uses the same CPC model to pay publishers through its AdSense program after deducting the revenue sharing portion.

Here is how CPC works with an example of Ads and adsense :

  1. Advertisers use the Google Ads platform to create advertising campaigns.
  2. Advertisers choose the keywords on which the ad should be shown and a bid per click (CPC). Let’s assume that the advertiser A It shows a CPC of $1 for an ad which is the highest bid for a given keyword.
  3. B publisher registration is enabled though Adsense program For ads on his site that contain the keyword chosen by advertiser A.
  4. Now based on keyword matching, Google thinks the interest of Advertiser A and Publisher B are identical.
  5. In order to ensure the highest revenue for Publisher B, Google will auction all bids from various advertisers and select the highest bid. In this example, it’s from Advertiser A at $1 per click.
  6. The ad will be displayed on publisher B’s website. When the user clicks on the ad, publisher B will accrue $1 as earning and for advertiser A as spending.
  7. Since Google plays a vital role being an intermediary between the publisher and the advertiser, it will get 32% commission on each click and pay the remaining 68% of the earnings due to the publisher, in this case, the publisher will get 68 cents and Google will get 32 ​​cents per click.

In case if the publisher is using any of the other Adsense revenue sharing sites, then the earnings will be reduced further based on the share percentage.

Here is an example of revenue sharing for content ads and search ads with a 50% discount from the revenue sharing site.

  cpc cost per click
cpc cost per click

How to calculate CPC

Cost Per Click (CPC) is calculated by dividing the estimated earnings by the total number of clicks received.

CPC = Total Revenue divided by Number of Clicks

In the above example, the CPC for Publisher B is 68 cents and the CPC for Advertiser A is $1. Advertisers can check the CPC amount they quoted in their Google Ads account, Publishers can see CPC in Adsense account their own.

Why is CPC important?

Cost Per Click (CPC) is the most important factor determining publishers’ earnings. As far as we analyzed CPC depends on three simple factors – country, keywords and quality/age of the site.

Country

The geographic location of the user who clicks on the ad is the first factor that will decide how the advertiser is willing to pay.

Generally, clicks from USA, Canada, UK, Australia, etc. tend to get higher CPC while clicks from India, China, Indonesia, Philippines, etc. Tend to get a lower CPC.

CPC and keywords

Advertisers place different bids for different keywords. You can use tools like the Keyword Planner to program Google AdWords To understand the bid for a category key words.

In general, sites that talk about recipes, stories, gossip, movie news, etc. attract a click price of $0.05 USD.

While sites with financial and insurance content attract $100 CPC.

See also: How to search for keywords

CPC and site age

It is also true that two sites with similar content will not attract the same CPC from advertisers. For example, you can’t predict the average CPC for CNN or the BBC when you launch a new news site.

What we have noticed is that the same site that attracts $0.05 initially may be earning $1 per click after a few years of time.

The reason is simple that once a name is created trade mark Advertisers may be inclined to place a bid on a particular site for the brand name rather than bid on keywords only.

The quality of the content on any site will also improve over the period of time, thus Attract more visitors and high CPC.

So if you are an Adsense publisher, keep an eye on your CPC through the various performance reports that Adsense provides you.

The key to success is keywords and patience in creating a website and getting high-quality traffic that comes to your site from Saudi Arabia, Germany, the United States of America, or the countries that pay the most.

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