Cost per click (CPC) refers to paid advertising where advertisers pay a cost each time an ad is clicked on. CPC is also referred to as PPC or Pay Per Click. Google Ads formerly known as Google Adwords is the largest CPC advertising platform. Businesses use Google Ads to target the area near to their location in order to target ideal customers.
The average cost per click varies across industries but is an average of $2.32 / £2.00 per click on the search network and $0.58 / £0.50 on the display network.
If a business has a higher CPC they are probably paying too much for clicks, likely due to poor campaign performance and a low quality score. CPC is important for companies as this number will determine the financial performance of campaigns and the success therefore how many new customers are gained per month. The ROI, or return on investment whether a business is overpaying for clicks is determined by CPC.
Businesses can reduce their CPC by increasing their quality score. Google automatically prices costs according to high performing campaigns and quality scores. For example ad accounts with quality scores of 6 or more (average is 5) receive a 16-50% reduction in CPC, compared to accounts with 4 or lower quality score receive an increase of 25-400% in CPC.
This means that in a town with 4 companies offering the same range of services, each business could be paying vastly more or less for new customers.
Here is an example:
Business 1: max bid $2.00 – quality score 10 – Ad rank 20 – Actual CPC $1.61
Business 2: max bid $4.00 – quality score 4 – Ad rank 16 – Actual CPC $3.01
Business 3: max bid $6.00 – quality score 2 – Ad rank 12 – Actual CPC $4.01
Business 4: max bid $8.00 – quality score 1 – Ad rank 8 – Highest CPC
These figures can make or break a campaign, and the success in terms of new customer enquiries and market share.
To significantly reduce ad cost, best practices should be followed in order to increase the Quality Score:
Increase CTR (click through rate) by writing relevant, focused and compelling ads
Build focused ad groups
Optimize and improve ad copy and landing pages which are based on the search intentions
Are you looking for new customers?
Through expert PPC management aligned with your business growth goals you can attract the customers you want for general services or any specific services or products.
Additionally, KPI focused dashboard reporting allows you to see real time progress and see opportunities.