CPC Cost Model (Cost Per Click)
It is one of the cost models. It stands for ‘cost per click’.
What is CPC?
In the CPC model, an advertiser pays a publisher each time a visitor clicks an ad. This scenario works well for advertisers that are interested in getting conversions rather than increasing brand visibility.
Advertisers’ costs do not depend on the number of times an ad has been displayed. Only a click results in a payment being drawn from their account. When using this cost model, an advertiser has to focus more on the quality of an ad and landing page rather than on curating a pool of placements, like with a CPM cost model.
Cost per click is used by industry giants such as Google or Facebook. The average CPC differs across verticals and niches.
CPC usually increases if you narrow down your traffic targeting options. The rule is that the more traffic targeting options an advertiser uses, the more accurate clicks they get, but at the same time, an advertiser gets smaller volume for a higher price. Balancing volume and targeting is one of the advertiser’s main tasks.
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There are two components of a proper CPC optimization process.
The first one is ad optimization. An advertiser needs to make sure their ad is attractive and visible. If they fail, there would be no costs, but no payout either. So step one is designing and testing the most performant ad. To start, an advertiser should prepare several ad variations and A/B test them.
The second component is landing page optimization. An advertiser’s worst scenario is a lot of clicks on an ad but no conversions. In such a case, costs go up but payout remains non-existent.
A good landing page has to be designed to be both attractive and informative for visitors, be consistent with an ad and offer in terms of how it looks and what message it conveys, and finally, it has to load fast.