There are a variety of digital advertising methods: paid search, geofencing, display advertising… the list goes on and on. Along with these methods come a variety of ways to pay, if you’re the brand or company doing the advertising. One of the most common ways to price digital advertising is CPC, or cost-per-click.
What is CPC (Cost-Per-Click)?
Quite literally, CPC advertising means you, the advertiser, pay based on how many clicks your ad receives. If millions of people see your ad but nobody clicks, you will pay $0. But how much does each click cost?
Well, that depends.
CPC = PPC
CPC (cost-per-click) and PPC (pay-per-click) are almost always used interchangeably. These terms typically refer to paid search advertising, a form of search engine marketing (SEM) that is similar to an online auction. In this auction, marketers bid how much they’re willing to pay to display their ads when searchers type specific words or phrases into the Google search bar. Put another way, advertisers bid on keywords, and the bids determine how high on the page their ads place when those keywords are searched. High-volume keywords (e.g., Nike shoes) with lots of competition will cost much more than long-tail keywords or phrases (e.g., Red nike shoes size 8.5) with less search volume and competition.
When a user clicks your ad? Ka-ching! You pay. Hence, cost-per-click.
CPC vs. CPM
So what other type of ad pricing structures exist? Another common form of digital advertising is CPM, or cost-per-impression, or cost-per-thousand-impressions. Instead of paying each time a searcher clicks your ad, you pay based on how many times your ad has the potential to be seen. This type of pricing model is common in display advertising (often called banner advertising), a form of advertising that allows advertisers and marketers to pay to show their ads on other websites.
So which is better: CPC or CPM?
Ah, the age-old debate. Frankly, here at Falls Digital, we believe CPC is better. And here’s why.
- Banner ads just don’t get the clicks. From a measurable ROI standpoint, we don’t like advertising solutions that are difficult to measure. This doesn’t mean banner ads don’t have a time and place – in fact, they’re terrific for branding and awareness campaigns – but when it comes to measurable results? Meh. Give us CPC over CPM any day.
- What counts as an impression anyway? Sure, the banner ad may have had the potential to be seen – but was it actually seen? Did the content of my ad actually register with a human being? Hard to say.
- Who Googles stuff? Well, Your company’s potential buyers are likely on Google right now looking stuff up, trying to solve problems. And you could probably help, if you had the opportunity. If a searcher is already in a problem-solving state of mind, they’re much more likely to click on your ad on a search engine results page (assuming your advertising chops are up to speed, of course!) if it offers them a legit solution. Why would you pass that up?
Want more information on starting your own CPC campaign? Look no further: