What is Cost Per Click (CPC) in Google Ads?

CPC or cost per click is the amount you pay for each click you get on your Ad in the PPC Ads campaign. Though it just appears to be the price you pay for each click, it is more than that. It is a critical PPC metric every marketer should consider to optimize the Ad campaign and improve the ROI. No matter what PPC platform you choose (Google, Bing, or social media), CPC plays an important role in the overall profitability.

As Google Ads is the most popular PPC platform, here we’ll talk about what is the cost per click (CPC) in Google Ads.

Cost Per Click (CPC)

Every time a user clicks your Ads, you are charged a small amount for each click. But, you can choose the maximum amount you can pay. This means you can bid high or low depending upon the keyword’s value or how closely the keyword relates to the users’ search queries.

Thus, CPC is the price you are charged for the clicks based on the keywords you bid on. The CPC you decide you pay for the clicks directly influences your campaign’s overall performance, including the number of clicks you receive, how frequently the search engine shows your Ad, and how good the ROAS is.

Thus, setting the right PPC Ad budget is the key, or choosing the right bid (CPC) is the key to running a successful Ad campaign.

If you set the bids too low, your Ads may not appear high in the search results, or they aren’t shown frequently. Furthermore, if you bid too high, you may overspend, which will likely affect the campaign’s ROAS. So, it’s all about choosing the right CPC amount for driving more ROI without missing out on the opportunities.

What Is The Right CPC In Google Ads?

Well, Google Ads ROI depends on how much you pay for the clicks and the quality of clicks you get out of those clicks. In order words, you want to get ‘optimal’ traffic to your website that provides value to your business.

The ‘good’ CPC in Google Ads varies depending upon the type of your business, industry, or advertising network. The competitive industries, such as software, finance, industrial equipment, etc., have expensive CPCs. Other less competitive industries have a low cost per click. Thus, there is no one-size-fits-all answer.

Then, How Much Will A Typical Click Cost You In Google Ads?

Since the average cost per click varies from industry to industry and business to business, the answer is a bit complex. However, let’s try to find a satisfactory answer by looking at the factors that affect the Google Ads pricing.

In Google Ads, CPC is calculated using the following formula-

Your Closest Competitor’s Ad Rank/Your Ad’s Quality Score + 0.1 = CPC

As an advertiser, you always pay a CPC less than or equal to the maximum bid because your CPC is the average of the competitors’ bids over a specific period of time. So, it is clear that your closest competitor’s Ad rank, Ad’s quality score, as well as maximum bid influence the amount you will pay for the click.

Keywords’ Influence On Google Ads’ CPC

In PPC, the commercial intent of the keywords and the value of /competition for the keywords influence the cost per click. Depending upon the market competitiveness, some keywords are more expensive to bid on compared to the others. Scatter plot examples for instance, legal and accounting are super-competitive markets, where clicks can cost you up to $1 or $2.

While the average CPC across all types of keywords, businesses is between $1 and $2, clicks get costlier as the market’s competitiveness increases. Clicks are cheaper on Google’s Display Network, though. Some of the most expensive keyword categories in Google Ads are insurance, mortgage, attorney, software, finance, degree, loans, conference call, etc.

But, you can lower the CPC while maintaining your Ad’s value by-

• Improving your Quality Score.
• Optimizing your Ads and landing pages for a better experience.
• Making your Ads relevant to the targeted keywords.

CPC For Long-Tail Keywords

Long-tail keywords cover most of the web searches. Suppose a user performs a search for ‘lawn care’ if they discover that their home garden or lawn is in pathetic condition. On the flip side, there are users who use a different approach, i.e., long-tail search query, ‘How to take care of the lawn in my house?’ Now, these users are looking for DIY methods for lawn care. At the same time, they might also be open to watching an Ad on lawn care service.

Thus, long-tail keywords provide the smart advertisers with an opportunity to cover most web searches. Also, long-tail queries are cheaper than short keyword search queries and have better commercial intent.

Four reasons Why you should advertise on Google Ads:

• There’s no minimum requirement to create a Google ad account or to run a campaign.
• You can see instant results anytime; this also means you can scale the results even if you had just launched a campaign.
• You can easily access even the slightest of data related to your ad performance.
•  You can check your campaign’s performance.

Conclusion

Thus, CPC is Google Ads is not just the price you pay to make your Ads go live. It is an important metric that affects how much revenue you generate from your Ad campaign. Moreover, the right CPC for your Google Ads depends on several factors, like keywords’ intent, competitiveness, market value, the type of your business, your competitors’ Ad rank, etc. However, you can make Google Ads work for you if you set your Ad campaign right, keeping all the key metrics in mind.

So, fix your PPC budget, choose the right keywords, improve your quality score, and optimize your Ads for user experience. When Google sees that your Ads are highly relevant and giving value to the users, it will boost your Ad’s score and lower your CPC.