When you first discover the world of online marketing, it can seem complex and overwhelming. Amongst other things, the wide variety of acronyms can be a challenge to understand, remember and differentiate. The acronyms PPC and CPC are no different in that regard.
So what do CPC and PPC stand for? What do they mean? And how can we recognize the subtle difference between the two?
What is PPC?
PPC stands for pay per click. It is a type of online advertising where advertisers pay for every click on their advert. This amount is sometimes fixed.
However, on most occasions, an advertiser will allocate a certain amount of their budget to a campaign per day or week.
The amount paid per click will fluctuate based on competition, bids, and search volumes.
The term PPC encompasses various types of campaigns with common elements. When creating a PPC campaign, factors such as the copy and CTA will also come into play, alongside the CPC.
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How does a PPC campaign work?
PPC campaigns work on a bidding system. The advertiser organizes ad groups for their campaign that are triggered by specific keywords. They will also select certain landing pages for the ad to lead to once clicked.
Depending on the scale of the campaign, the advertiser may also have numerous ad groups and landing pages, as well as a wider variety of targeted keywords.
Once all that is set up, the advertiser bids on their selected keywords that they believe are relevant to their campaign after their research. Popular keyword search terms are more expensive to target, due to their level of competition.
Less popular terms are cheaper. The best PPC campaigns are those that find the cheaper keyword search terms that can still generate the desired results.
You can also choose to set a maximum bid (that automatically adjusts based on competitors’ bids) for each search term or go with a set bid. The highest bid has a better chance of being shown on a platform. However, PPC ads are not only down to who bids the most. They are also down to platform algorithms.
Most platforms will also judge PPC on how well they meet the search intent. This is where having a relevant ad, and equally relevant landing page come into play, as they will match the search intent. Irrelevant ads and landing pages will likely have a high bounce rate, and will then be deemed lesser by the platform.
Google is a great example of this situation, as the platform selects PPC ads by their Google Ad Rank. These ranks are generated based on the advertiser and advertisements quality score. This is calculated through the CPC bid, the quality and relevance of the ad, landing page, and keyword combination.
Other factors such as click-through rate, bounce rate, and historical ad performance are also part of the quality score calculation. This system provides sufficient incentive for advertisers to generate high-quality, accurate advertisements.
Where are PPC ads used?
PPC ads are used throughout online advertising. They are most commonly associated with Google but are also increasingly common on Amazon and social media platforms, e.g. Facebook Ads.
They can be found throughout each of these websites in varied areas, from sidebars to feeds, videos, or even search results.
Types of PPC advertisement
PPC advertising encompasses a few different types of campaigns across numerous platforms, such as:
- Product listing ads
- Search ads
- Sponsored product adverts
- Headline search ads
- Sponsored brand advertisements
- Product display ads
- Shopping advertisements
- Video ads
- App ads
- Dynamic advertisements
- Lead generation ads
What is CPC?
CPC stands for cost-per-click. Cost-per-click is just part of the grander advertising area that is pay per click advertising.
The metric measures the cost-per-click of your PPC ads, and allows you to better understand the cost benefit situation of advertising certain keywords. This means you can then calculate the best way to get a higher return on your investment.
Cost-per-click fluctuates heavily depending on the keywords, level of competition, and frequency of the search terms.
Calculating CPC and its effectiveness
Calculating cost-per-click is actually a simple process. Once you have your campaign up and running, you take the total funds spent on the campaign and divide that number by the total clicks. This gives you your CPC.
Once you have your cost-per-click, you will have a better idea of the true effectiveness of your campaign. If your CPC is high enough, you may have an issue with your ad relevance.
You can use A/B testing to gradually lower the cost-per-click of your campaigns, by finding ways to optimize them through trial and error.
Successful A/B testing should see your CPC lower after each calculation if you are changing the right variables in your campaign.
The key difference between PPC and CPC
In short, the key difference between PPC and CPP is that PPC is an advertising approach, whereas CPC is merely a metric within that approach.
Pay-per-click campaigns are organized using ad groups, which are essentially a set of advertisements that appear for certain keywords.
Cost-per-click is ideal for measuring such campaigns’ performance and finding out whether any changes you made have a positive impact.
Cost-per-click allows you to measure the effect of changes such as alternate landing pages, keywords, or copy in a PPC campaign, be it negative or positive.
Now the difference between PPC and CPC is clearer, you can focus on getting the most from your advertising campaigns.
Remember, there is a lot more to PPC advertising than just CPC.
Focus on optimizing all areas of your advertising, from your copy to your landing page relevance.
This should help you to maximize the effectiveness of your PPC advertising.