What is CPC in marketing?
When running online marketing campaigns, there are different ways to pay for them announcement on. When choosing the CPC payment method, you pay a price per click on the ad in question. This means that if you have an ad running on e.g. Facebook and you pay via a CPC agreement, you will have to pay money to Facebook every single time Facebook users click on your ad. Instead of CPC, the term PPC, which stands for Pay Per Click.
The advantage of the CPC payment method is that you can expose your ad to a larger audience, where you only pay for "potential" customers' clicks on the ad. In other words, you pay for those who show interest in your product, service or company - and since they have chosen to click on your ad, they can be considered potential customers.
Two other common forms of settlement are CPA (Cost Per Acquisition) and CPM (Cost Per Mile).
How to calculate CPC
Whether CPC is a good form of payment can be calculated by looking at what you earn on average per user who clicks through to your website.
The formula is quite simple: If your profit on the users who click through to your website is greater than what you pay for the entire CPC ad, then the price you pay per click is worth it.
CPC and Google Ads
If you want to get started with Google Ads, it's a good idea to get familiar with CPC beforehand.
Google Ads works with CPC, where you as a company have the opportunity to bid with your ad in their so-called "auction system".
The placement of your ad in Google Ads is calculated based on various parameters. If there is a lot of competition for the keyword you want to compete on, you will often have to pay a high CPC and conversely, if there is little competition, the price per click will typically be lower.
