Cost per click (CPC) also called Pay per Click (PPC) refers to the amount of money that is paid per click on an Ad placed on a web page through AdSense.
In simpler terminology, it is the amount that an Ad campaigner pays, and a web publisher receives when a viewer clicks on an Ad published on their web page.
The price is fixed per Ad view, and it is multiplied by the number of views through viewers who clicked on the Ad to check it out.
Cost per Click, generally, is associated with tier 1 search engines like Google and Bing. Advertisers usually bid on keywords that are relevant to their products or services.
Content Websites, on the other hand, do not rely on bidding and charge a fixed amount for CPC. Websites can offer CPC ads.
Sites that use cost per click ad system would display an ad when a keyword query matches an advertiser's keyword list which had been added in different ad groups, or when a content site displays related content.
In simple words, it is used to calculate CPC. Pay-per-click has certain advantages over cost per impression in the sense that it conveys information about how effective the ad campaigning was.
Clicks are also used as a means to measure attention and potential customer curiosity. If the primary purpose of an ad is to get a click, or more specifically get traffic to a destination, then cost-per-click is the preferred metric.
Once a significant number of web impressions have been achieved, the quality and placement of the ad would affect click-through rates and the consequential CPC.
The eCalculator CPC calculator has made the CPC calculation easier and simpler. It allows you to calculate the cost per click rate in real-time, given that two values are provided for. It will calculate cost per click rate for you if you input the total cost of an ad campaign and the total number of clicks.
On the other hand, it will calculate the total cost if you provide the total number of clicks and the cost per click. Subsequently, if you provide the cost per click rate as well as total cost, it would calculate for you’re the total number of clicks.
The Cost per Click Calculator at eCalculator is free to use. It doesn’t ask for registration to the site either. The tool has been created to facilitate web publishers as well as the advertisers.
It is quite simple:
CPC = total_cost / number_of_clicks.
You can also derive it from CPM (Cost per Mile) and CTR (Cost through Rate)
CPC = (CPM / 1000) / (CTR / 100) = 0.1 * CPM / CTR.
These days, however, the general model is not quite as straightforward as the one you see here. Ad campaigners frequently compete over the ad placement in bidding auctions.
Special algorithms take various factors (the CPC of each ad and their performances) into account and attempt to forecast actual revenue for each impression.
Flat Rate Cost-per-Click model implies a fixed cost per click rate. Generally, the publisher and the advertiser would agree on a fixed ad rate per click. However, the publisher may have different rates for different locations on their website.
For instance, the CPC rate may be higher for site locations where the content is most relevant as well as high quality and lower for locations where the quality is mediocre or irrelevant to the ad in question.
The model of flat-rate CPC is specifically common to comparison shopping engines, which usually publish rate cards.
However, these rates are sometimes quite minimal, and advertisers could pay more for greater engagement to their ads.
These sites usually list product or service categories, enabling a higher degree of targeting by advertisers. In many instances, the absolute core content of these sites is paid advertisements.
Another type is the Bid Based CPC model where advertisers compete with each other in bidding for ad placement typically on high value and high traffic websites.
The web publisher or advertising networks usually host the auction. Each advertiser informs the host of the amount they are willing to pay, the highest bidder wins the auction and gets their ads placed on the web pages of the particular site that hosted the auction.
CPC is quite similar to CPM (Cost per Mile) with Mile in this context being equivalent to a thousand impressions.
You pay each time someone views your ad by clicking it when they are placed on webpages in CPC.
CPA (Cost per Acquisition) model refers to the action when the advertiser has to pay only when a purchase is made which can be traced back to the purchaser by click on the ad that led the buyer to purchase.
If you're using CPC or CPA models, it's crucial to have a high click-through rate (CTR) as the objective of the ads is to get someone to buy the product you're marketing.
As has been mentioned above, CPC and CPM are quite similar. In CPC, a publisher gets paid when viewers click on the ads.
On the other hand, in the CPM model, a publisher gets paid for the number of ad impressions he gets by placing ads on their webpages.
Impressions are simply the number of people who see your ad. They don't have to click on the ads for it to be considered an impression.
You can use CPM calculator to calculate the total cost of the ad campaign if you input the number of impressions you want as well as the Cost per thousand Impressions.
Similarly, you can use it to find out the Cost per Mile, by inputting the number of impressions you want for your ad as well as the total budget for your campaign.
And if you have the CPM value as well as a set budget capital for your campaign, you can calculate the total number of impressions you can get for your ad.
The eCalculator Cost per click calculator is useful for both the web publisher and the advertiser in the online business world, which is channelled through Google AdSense.