CPC, or Cost Per Click - how do you calculate it and what influences it?

Advertising campaigns are one way of increasing website traffic and attracting new customers. However, it turns out that doing effective yet cost-effective advertising can be difficult. Fortunately, there is a simple and effective cost estimation model to help with this. We are talking about CPC - what is it and how can you use it for your business?

CPC - what is it?

Cost Per Click (CPC) means cost per click . It is one of the most widely used billing models geared towards efficiency and streamlines the monitoring of campaign results. The advertiser pays for Advertisement only when the user clicks on it - just displaying it does not generate any costs.

We can divide CPCs into four types:

• maximum CPC rate - is the maximum cost per single ad click. This means that the system will not exceed this rate in an auction;
• actual CPC - is the actual amount we will pay for a single click. However, it is worth bearing in mind that it may have a different value each time;
• average CPC - i.e. the average rate we pay per single click. Example? If we paid £0.10 for one and £0.20 for another, the average CPC cost is £0.15;
• improved CPC - a tool that adjusts the CPC in such a way as to increase the conversion value.

The type should be chosen taking into account all business needs and expectations. It is impossible to single out one solution better than all others.

Marketing in the digital world - is it really that important?

Excellent online visibility should be fought for by any company operating online. On the web products and services can be sold by anyone , provided, of course, that the offer really reaches an interested audience.

At InPost, we provide some interesting marketing solutions. You can find out more about them, among other things, on our official website and by talking to our consultants. Our representatives will answer all your questions.

Apply to us and increase the reach of your business . We will display your advertisements not only online within our website. If necessary, you can also choose to place them on, among other things, the screens of the Parcelkomat® machines or to cover our machines with them.

How do you calculate CPC, or Cost Per Click?

How do you calculate the CPC of an advertising campaign? No worries, it is very simple. The average cost per click is calculated by dividing the total cost of clicks by the total number of clicks . Please note that the average CPC may differ from the maximum CPC, which is the highest amount we have agreed to pay for a single click.

To simplify the process of calculating CPC, you can use the following formula: cost per click = total cost of clicks / number of clicks.

Let's illustrate this with an example. If your ad generated 1,000 clicks, with 300 of them costing PLN 0.20 and 700 of them costing PLN 0.30, the total cost of the clicks was PLN 270. The total cost is then divided by the number of total clicks, which in this case is: 270 / 1000. This gives us CPC = PLN 0.27.

How to use CPC in budget planning?

Anyone who has planned an advertising budget at least once knows that it is not easy. The success of a campaign depends on many different factors, and even the highest CPC rate does not determine satisfactory results . In order to budget well for CPC advertising, it is useful to know what influences the outcome of a campaign.

First of all the advertisements should correspond to the user's intentions . In other words, the ad should match the search terms and redirect the Internet user to the target website. Keywords directly influence the quality of the adverts.

The more generic they are, the more results they will generate. At the same time, this means a greater number of advertisers displaying ads for the phrases. The most popular and simplest keywords are always the most expensive. Setting up specific keywords will not only cost less, but will also attract a more valuable audience.

Moreover, there is the possibility to limit advertising so that it appears at specific times of day and in specific locations . In the statistics in your advertising account, you can see at what times your adverts are most frequently shown.

The Keyword Planner tool can be helpful in setting a budget. It is used to determine which keywords best fit your business. It allows you to see how often certain phrases are searched for and what their prices are.

It is also possible to simulate a campaign. This allows you to make a preliminary determination of what budget will be needed to achieve a specific objective. However, it is worth bearing in mind that such cost estimation tools are primarily based on historical data and trends.

Advantages of using the CPC model

As we mentioned, Cost Per Click is one of the most common online campaign billing models. Among advertisers, this model is valued primarily for the fact that payment only occurs when a user clicks on an ad that takes them to a website.

What are the other advantages of using the CPC model in marketing? It's a great opportunity to reach those who are genuinely interested in a particular product or service - the ad is displayed in response to phrases that internet users type into a search engine.

Targeting is also made easier - it is possible to reach a target group based on demographic data or even on the user's current device. Another noteworthy feature is the ability to modify and optimise the campaign at any time. This also applies to changing the price per click.

Significantly, CPC-based advertising is easily measurable . Just a few days after the launch of the campaign, an increase in the number of visitors to the website can be seen.

CPC - when to use it?

Wondering when it makes sense to opt for advertising campaigns based on the CPC billing model? It's a great choice if you're just starting out in your online business.

When a company takes its first steps in the market, it is very important to stand out from experienced competitors and build brand awareness . Regardless of the size of the investment, CPC adverts make it possible to quickly and efficiently reach potential consumers and gain first customers.

Cost Per Click is also an excellent solution for companies that operate primarily locally and do not have much competition in the area. Because of the payment model, in which the cost depends on the number of competitors, such businesses can launch an advertising campaign at a relatively low price.

No matter what industry you are in, Consider a CPC campaign during holiday periods or seasonal sales . Why? This is when consumers are most often looking for attractive bargains and gifts for loved ones.