Cost per click (also known as CPC or pay per click, PPC) is the pricing model in digital advertising where an advertiser pays for every time a user clicks on the ad.
This option is considered to be more beneficial than the cost per impression model. A click means that the person has seen the ad and is interested in your product or services. Therefore, you are paying for attention from users that have a higher buying intent than regular website visitors.
Cost per click depends on your maximum bid and competitors’ bids. The cost will be the same or a little bit lower than your maximum bid. However, if you do not take into account competitors’ bids, your ad will either 1) be displayed every time because you always outperform competitors or 2) never come up because competitors always outperform you. It is better to strive for the average.
Google Ads, for example, allows you to decrease your cost per click if you have a good Quality Score. Quality Score can be increased by:
- improving the relevance of your ad
- improving clickthrough rate
- creating the best UX/UI on landing pages
