Jun 24, 2014

PPC Minute: Average Cost-Per-Click (CPC)

What Is It?

The average amount paid for clicks on an ad.

How Is It Calculated?

Total cost of all clicks on an ad during a specific time frame divided by the total number of clicks on that same ad during that same time frame.

Average CPC Calculation

Average CPC Calculation

Example:

An ad cost you $200.00 during the month of May. The ad was clicked 1,000 times in May. The Average CPC was $0.20.

Average CPC Calculation Example

Average CPC Calculation Example

Why It’s Important?

Understanding the average amount you are paying for clicks on your ads can help in determining if an ad or keyword is performing well or not. In most cases, the Average CPC will be well below the Maximum CPC (the most you are willing to pay for a click). Also, if you have well performing ads and keywords, you can end paying less and have your ad shown higher in the search engine results page.

What’s a Good Average CPC?

This will vary greatly by the keywords you are bidding on, the locations you are targeting your ads to and the markets you are in. A good Average CPC can only be determined by you; if you feel you are getting a good return on clicks on your ads, your Average CPC is good.

How to Improve Your Average CPC

Improving your Average CPC can be done by continuously optimizing your ad campaigns by:

  • Ensuring your keywords are relevant to your ads.
  • Improving your keywords’ Quality Scores.
  • Creating landing pages on your website which are relevant to your keywords and ads.
  • Including negative keywords in your campaigns and ad groups to decrease irrelevant traffic.

The Bottom Line

Improving your Average CPC will allow you to get more clicks (and possibly sales, leads, etc.) without having to increase your budget.

Average CPC Down = Clicks Up = Sales/Leads Up

Average CPC Down = Clicks Up = Sales/Leads Up

Being vigilant about making campaign updates will be rewarded with lower costs and getting more for your PPC budget!

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