The Cost Per Click Conundrum

Dan Todd
Dan Todd
Oct 20 · 2 min read

Surely a lower CPC is best?

At the heart of any Pay Per Click (PPC)campaign are metrics that determine the results achieved from your campaign. Whilst PPC campaigns can vary, they all have two objectives they must fulfil, one after the other.

Objective 1: Be Viewed. The ads must grab the attention of the audience it’s been shown to.

Objective 2: Be Clicked. The ads must then entice the audience to take the action of clicking, so that they might ‘learn more’ or ‘buy.

As clicks are so essential, so too is the metric of Cost Per Click (CPC).

As with any area of marketing, you want to optimise your PPC campaigns to maximise your results whilst minimising your cost.

It’s therefore common for businesses to prioritise the lowest possible CPC. This is fine, but businesses must go further and measure the cost per conversion, where possible.

This will allow the business to better determine the value of the clicks they’re achieving. The value and quality in the clicks can vary massively. Let’s look at two examples:

Example one:

PPC campaign spend: $100

Clicks: 200

Cost Per Click: $0.50

Conversions: 1

Conversion rate: 0.5%

Example two:

PPC campaign spend: $100

Clicks: 100

Cost per click $1.00

Conversions: 5

Conversion rate: 5%

Which campaign did best? If basing purely on clicks, campaign one did the best as it achieved clicks at a lower cost. BUT, the only purpose of clicks is to get people to a page where they will then convert.

Campaign two had a higher cost per click, but a higher conversion rate. So if basing on the conversion (as businesses should), campaign two did best.

The key point is that clicks are not of equal value. More does not always mean more. Sometimes it’s better to get less clicks from an audience that will convert, than clicks from an audience who won’t.

Don’t ignore your cost per click entirely, but consider it as part of the whole. Don’t assume a campaign is doing great because of a low CPC.

And be aware of a marketing agency who can claim they can get you many leads for a low cost. Quality is the what is important, not quantity.

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Dan Todd

Written by

Dan Todd

Helping Businesses Grow www.themarketeer.info

The Startup

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