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Google Cost Per Click, CPC

home / ADWORDS BASIC / Google Cost Per Click, CPC

Google Cost Per Click, CPC

People who want to use Google Adwords to promote a website, product or service will need to focus on their CPC. The last thing anyone wants is to spend more cash than is necessary for each click. So, it’s important to reduce the cost as much as possible and boost conversion rates.

We’ve published all the information you need to get better results on this page, and we hope it will aid your campaigns. At the end of the day, it’s not a complicated process, and you just need to increase your understanding. With that in mind, we’re going to start with the basics and then move onto some in-depth tips and tricks.

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What is CPC?

Your cost per click is the amount you pay every time someone engages with your adverts. Each click equates to a visit to your website by a member of your target market. So, the more clicks you achieve, the better your results will become. However, you still need to make sure you’re targeting the most suitable keywords. Otherwise, you’ll send people to your site who have no intention of making a purchase. That means you effectively waste your investment and never build your conversion rates. If you want to achieve the lowest CPC possible, you’ll have to alter your approach and increase the relevance of your campaign. We’ll show you how to do that in just a moment.

How does Google calculate CPC?

Google uses a broad range of different statistics and information to work out how much you pay for each click. However, marketers have discovered that you can determine the cost with a simple formula. In most instances, you just need to divide your Competitor Ad Rank by your Quality Score. You then add .01 to discover the CPC.

cpc-01

Advertisers should find that their cost per click is less than or equal to their maximum bids. However, it’s vital that you understand how much your competitor’s ad rank can affect the price you pay. When working out which ads to display, Google uses an auction system that considers all the three factors listed above. You will always pay less for keywords that are not as competitive as others. Even so, the most competitive keywords are usually the most fruitful. So, you need to find a middle ground to ensure you can reach the right people and still make a healthy profit.

What is a reasonable CPC for Adwords?

It’s hard to give accurate figures because there are too many elements to consider. It all comes down to what you’re trying to sell and how many other advertisers are pushing for the same keywords. However, researchers have worked out some ballpark figures for various ad types. So, you can use these as a guideline for what you could achieve. The currency is listed in Australian dollars.

As you can see, there are massive differences between the average cost per click for different industries. CPC rates can vary from as little as a few cents to many dollars. However, in most instances, you just need to focus on making improvements. It doesn’t matter how much you’re paying as long as you’re working to drive the cost down. While you need to compete with other advertisers, most of the competition occurs with yourself. A good CPC strategy should mean you pay less every time you run a new ad.

Why is CPC so important for Adwords?

The amount of money you pay for each click is important because it could determine your success. At the end of the day, there’s no point spending $1000 on Adwords if you only make $100 in profit. That’s a terrible return on your investment, and it will bankrupt your company if you decide to continue without making changes. For that reason, you need to focus on both your CPC and conversion rates. You don’t always need to lower the price you pay for a click if you can make each interaction count. By refining your keywords and making sure the only people encountering your ads are from your target market, you can turn things around.

What are the best ways to lower CPC?


There are some different techniques you could use to lessen your CPC. However, you need to make sure that you don’t reduce the quality of your ads. For instance, you can often lower the cost by targeting cheaper locations. Even so, it doesn’t make sense to push your ads towards people in the Philippines if you only ship to Australia and New Zealand.

Here are some strategies that could encourage an improvement:

Making better use of keywords

As we have already discussed, your use of keywords could play a significant role in CPC. You need to select the most relevant words and phrases for your campaign. However, you also need to identify an extensive list of negative keywords that you don’t want to target. You can do that by taking a look at the performance of each of the words you use today. Are there any that don’t seem to get reliable results? Can you find some that never turn into conversions? If so, add them to your group of negative keywords so you don’t waste money.

Expanding the reach of the campaign

The more people you target; the less you will pay for each click. However, it’s easy to get carried away and extend your reach too far. With that in mind, you should try to mess around with different targeting options until you find something that works. Run each new idea for at least a couple of days so you have enough data to perform an assessment. If your CPC decreases and your conversion rates increase, you’re onto a winner.

Improve your Quality Score

Firstly, it’s important to note that Quality Score is what Google uses to determine which ads they’re going to show each user. In most instances, advertisers with a high-Quality Score will see a 15-50% discount on their clicks. So, you need to work hard to boost the score and encourage Google to act kindly towards your campaigns. You can do that by increasing the relevance of your ads. Make sure they use the best keywords, and ensure your landing pages are correct. For example, people who publish ads for fashion and then direct people to a sports website will never achieve a decent Quality Score. Google will think you’re effectively trying to trick people into visiting your domain.

How much can someone expect to save with CPC reductions?

As we just mentioned, marketers with a Quality Score of six or more can expect to see massive reductions in price. That sometimes equates to as much as 50% if Google thinks the advertiser is reputable. However, those with a Quality Score of less than four could end up paying as much as 400% more than their competitors. It makes that much difference!

If you struggle to reduce your CPC this year, you can always ask the experts for help. There are some excellent forums you could use to discuss strategies with other advertisers. However, there are plenty of specialists working in the industry that could handle the process. The best thing about that idea is that you will have more time to work on the growth of your business. As you can see, it takes a lot of time and effort to optimise your Adwords campaigns. That is why so many business owners decide to outsource the task.

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