What is CPC?
CPC- also known as Pay-per-click (PPC) cost per click (CPC), is an internet advertising model used to drive traffic to websites, in which an advertiser pays a publisher (typically a search engine, website owner, or a network of websites) when the ad is clicked.
Cost Per Click is commonly associated with first-tier search engines (such as Google Ads and Bing Ads). With search engines, advertisers typically bid on keyword phrases relevant to their target market. In contrast, content sites commonly charge a fixed price per click rather than use a bidding system. PPC “display” advertisements, also known as “banner,” ads, are shown on web sites with related content that have agreed to show ads and are typically not pay-per-click advertising. Social networks such as Facebook and Twitter have also adopted pay-per-click as one of their advertising models.
However, websites can offer PPC ads. Websites that utilize PPC ads will display an advertisement when a keyword query matches an advertiser’s keyword list that has been added in different ad groups, or when a content site displays relevant content. Such advertisements are called sponsored links or sponsored ads, and appear adjacent to, above, or beneath organic results on search engine results pages, or anywhere a web developer chooses on a content site.
The PPC advertising model is open to abuse through click fraud, although Google and others have implemented automated systems to guard against abusive clicks by competitors or corrupt web developers.[
Understanding Cost Per Click (CPC)
CPC is often used when advertisers have a set daily budget. When the advertiser’s budget is hit, the ad is removed from the rotation for the remainder of the billing period.
For example, a website that has a CPC rate of 15 cents and provides 1,000 click-throughs would bill $150 ($0.15 x 1000). The amount that an advertiser pays for a click is usually set either by a formula or through a bidding process. The formula used is often cost per impression (CPI) divided by percent click-through ratio (%CTR).
CPC is the amount that a website publisher receives when a paid advertisement on the site is clicked. Business is increasingly done online, and advertising is following. Publishers usually look to a third party to match them with advertisers; the largest such entity is Google Ads.
Web site publishers can contract with Google to place ads on their site. The ads can contain a combination of text, images, or videos. Google decides what type of ads to run on a given site, based on the amount of traffic that it receives, the type of content or subject matter, and the number of advertisers interested in the material.
The publisher is paid based on the number of times viewers click the ad; the amount paid per click is that ad’s CPC. Advertisers bid how much they are willing to pay for each click, and Google uses complex algorithms to match publishers and advertisers. Sites with the largest number of unique visitors and that incorporate the most valuable keywords receive the highest CPC. The auction for ads is dynamic and continuous, so CPC changes constantly.
Small publishers find it very difficult to make money via Google AdWords. It can be difficult to meet the criteria to join the program, and even if accepted, the minimum payout of $100 is beyond the reach of many.
As digital currencies such as bitcoin become more mainstream, so-called peer-to-peer (P2P) networks are using blockchain technology to move into online advertising. The best known is BitTeaser, which debuted on January 2015. It charges and pays in bitcoin and accommodates far smaller users, CPCs and payments than AdWords.« Back to Glossary Index