It’s hard to discuss PPC advertising and its benefits without explaining cost-per-click (CPC). Regardless of whether we’re talking about Google Ads, Facebook Ads, or any other type of online advertising platform, cost-per-click stands at the heart of PPC advertising.
However, a lot of people don’t really know what CPC is and how big of a role it should have in their marketing decisions. With that in mind, let’s now try to explain what this metric represents, what it measures, and how it ties into the advertising decisions that you have to make.
What is Cost-Per-Click?
In the simplest explanation possible, cost-per-click describes just what you think it does: how much an advertiser should pay for a click. However, because this term is so tightly connected to PPC advertising, many marketers use the two terms CPC and PPC interchangeably.
This term was first introduced in the ‘90s when companies like GoTo.com and Planet Oasis developed the very first pay-per-click advertising model. However, the term didn’t really become popular until Google introduced PPC to the AdWords platform, which changed the whole world of online advertising.
Nowadays, every marketer and business owner should know what PPC and CPC mean and represent. After all, those two concepts are key in developing a successful company in the digital era.
Why Does CPC Advertising Matter?
A lot of entrepreneurs and business owners like to think about cost-per-click as the price of online advertising. While in most cases that can be accurate, CPC is much more complicated.
In reality, CPC is the solution to the question, “How do I make money off this huge user base?” Until Google broke through with its own CPC model, other search engines like Yahoo also had a huge user base but had no idea how to earn money from it. Everyone understood that having a massive audience is a plus, but no one had found a way to turn that user base into cash.
Thanks to the CPC model, Google showed how you could make money off an online user base by implementing a relatively simple formula:
- Have an online platform that solves a currently unmet need.
- Get a large user base of people who use the platform.
- Charge companies to advertise to that user base.
Ever since that model launched, it has been reused time and time again by various businesses. Nowadays, all social media platforms make a ton of money thanks to their advertising solutions, and the list includes everything from Facebook and Twitter to Reddit and LinkedIn.
If we have to give a simple answer to the question, “Why does CPC advertising matter?” it would be that it matters because it is a marketing tool that is able to help businesses drive sales and increase revenues while financially benefiting the platforms that offer it.
Is Using CPC Advertising Worth It?
The most honest answer would be that it depends on your company, the market that you aim to target, and what you want to achieve. In most cases, a well-executed, detail-oriented PPC advertising campaign may do wonders for your business. It can help boost brand awareness, get new leads and drive sales. That is especially true if the campaign is executed on platforms where your target audience is really active.
With that being said, some business owners and some marketers don’t put the needed effort in it or use it unnecessarily, and in those cases, it simply doesn’t work and ends up being money thrown out the window.
So how can you make the most of CPC advertising? Well, by hiring an agency that can do it properly. Having professionals with experience in marketing who know your industry and have sufficient knowledge on how to run PPC campaigns successfully will ensure that you get the return on investment you desire and that the advertising effort was worth the end results.