Adwords Cost Per Click – CPC

When we talk about the Adwords Cost Per Click, known also simply just as CPC or Avg. CPC, we talk about the average cost you are paying for one person to click on your advert. This average cost is the benchmark you need to try and improve (By lowering the price), and is part of successful Adwords Management.

Google Adwords Pay Per Click Program … Learn about CPC

CPC means cost per click and is the amount you pay Google every time some clicks to your web site via the Google Adwords ad

It is vital to understand what control you have ….

CPC is not constant

Minimum you will ever pay is R0.40 or US$ 0.05

Maximum you will ever pay is that set by yourself when you set up the campaign

There are no refunds for mess-ups

It is best to use an example to show relationship between CPC and CTR (click through rate) …

Let’s assume you and your competitor both bid $1 for same keyword … say pond pumps

Which of these 2 bids will rank higher? …

Answer, the one with the higher CTR

The relationship between CTR and position is dependent upon the two variables multiplied together ie (your CTR x your bid)

Lets’ put it another way … I get a 1% CTR for my keyword pond pumps. This means of every 100 people who saw my add 1 person clicked through and that cost me $1.00. On the other hand my competitor who also bid $1 had a CTR of 2%. So my competitor can lower his bid to $0.50 to get the same position as me and if he bids $0.51 (only 1 cent more) he will get the position above me. Now that’s a bargain

In effect this means I will pay twice as much as my competitor.

Google rewards high CTR reducing the amount I pay per click and also by increasing the position of my ad so more people see the ad and this means that there will probably be an even better CTR  the next day.

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