Cost per Click (CPC)

Cost per click is also known as pay per click. It is a form of digital advertising, and CPC is the actual price you pay to the publisher every time an online user clicks on your ad. For instance, you have a beauty salon and you may run a CPC ad on Facebook or Instagram to advertise a new discount offer. You only pay when someone clicks on your ad; you don’t owe anything if they scroll past it.

What are the types of CPC?

There are two primary formulas:

Flat rate/Formula based: When search engines or site publishers use this formula they have already set an amount in their mind to charge the advertiser for their CPC campaign. This depends on how often other websites advertise with particular keywords used in CPC ad, or going to rate for similar advertisements for other platforms. There is also a formula to calculate the flat rate. The formula is:

Flat rate=Cost per impression/percentage click-through ratio(%CTR)

Bid based: This method is used by many platforms like Google. In bid-based advertising, you compete with other advertisers to bid for a targeted keyword and the amount you are willing to pay for every click on your ad.  This method works when the advertiser sets the duration for a campaign and the maximum amount they want to spend per click. The latter figure is their bid.

Clicks Per Search

Click per search shows the average number of clicks for all searchers. It is basically a correlation between clicks metrics and search volume of the keyword.