The CPC you pay is the amount you pay per click. As you probably want to spend your money as efficiently as possible, a lower CPC is generally a good thing.
However to ensure the success of your site you will first and foremost want to encourage interested, repeat visitors to come to your site. These engaged users are much more valuable than uninterested masses of people just passing through.
This is why we recommend focusing on improving your CTR rather than CPC. The more keen a set of users are on clicking on your ad, the more likely they’ll actually be interested in your content.
Optimising your CPC
Once your CTR has mostly stabilised at a good level, you should focus on improving your CPC too (this will probably be after around 3 months).
To optimise your CPC you do almost the same thing as when optimising for CTR:
- Run a report showing everywhere an ad has been delivered.
- Remove anything which has delivered less than 1,000 impressions
- Remove anything which has a CPC lower than your average CPC.
- Out of what is left, stop delivering ads to the worst keywords/placements.
This will drive your average costs down in the long run. Make sure to take into account the CTR of each keyword/placement before removing it. Anything which has a better than average CTR should get a pass and not be removed. This goes doubly if you are recording conversions – don’t stop good converters!
If you are struggling to find enough places to advertise on in the first place, you should also consider the volume each keyword/placement is delivering. If there is an item that gives you the majority of your clicks then you should consider leaving it running too.
More expensive clicks are often worth the extra expense
In a lot of cases, a higher CPC means a “better” click.
For display advertising, this can be because of the algorithms determining which ads to show and when will choose your ad earlier. This is because paying more for a click likely means a higher eCPM, which in turn means it will be competing with higher CPM campaigns.
Being shown earlier to users can help capture them while their attention is still high.
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