Guide to understanding Cost per click advertising

Guide to understanding Cost per click advertising

Cost per click advertising is also popularly known as (CPC) or as others refer to it as Pay per click (PPC) is one of the most popular ways online businesses and digital marketers use for calculating the cost of clicks acquired through PPC advertising.It sounds very easy looking at the above description, however, there is more to it than just a form of advertising.

In recent years, Pay per click advertising to become more complex and competitive which means, online marketers need to optimise their game to rank their Ads.

It takes a combination of various inputs and factors to actually profit from Pay per click advertising while dramatically lowering the cost per click on campaigns.

Several digital marketers struggle to get their CPC to earn high ROI on their campaigns. The solutions to this are understanding how the cost per click works.

In this blog post, we are going to explain Cost Per Click advertising thoroughly including all the strategies you need to implement and manage a successful CPC or PPC campaign.

What is Cost Per Click Advertising?

Cost per click (CPC) also known as Pay per click (PPC). In a layman’s language, simply means the actual amount of money you pay per click when running an advertising campaign.

What is Cost Per click?: The actual amount of money you pay per click when running an advertising campaign.

The actual cost of every click is what it refers to as CPC. Some digital marketing experts actually refer to cost per click as the cost assigned to each keyword by search engines such as Google.

Cost per click

CPC Ad Group

The truth is, If that’s true, no one will be able to pay for Google PPC campaigns. Even though there are more important factors to pay attention to when running a Cost per click campaign, however, it is still very important to understand how cost per click works especially in Google Ads.

How does Cost Per Click works?

Cost per click is just one among many other metrics CPC platforms such as Facebook, Google Ads and Bing use to evaluate PPC campaign performance.

The most popular CPC advertising platform is Google Ads also known as Google Adwords which this article is mostly centred at.

This is because has created a reputable system that delivers what the customer want’s to see.

Google has developed into a monstrous Advertising platform because it shows most updated, relevant search results to people all over the world.

It is estimated that Google process about 3.5 billion search queries every day. In my opinion, As of today, Google process over 5 billion search queries every day.

Each of these 5 billion queries returns results based on the most relevant keywords. This is how auction Ads are also determined to display alongside those search results.

How is Cost Per Click Calculated

Most ad networks display the average cost per click on various keywords. This does not reflect the actual CPC your Ads will be paying for but rather to show you an average cost per click of those keywords.

In particular, Google Ads calculate your CPC by using two variables or factors if you like which are usually your closest competitor AdRank and Your Quality Score.

The formula for this is… Competitors AdRank is divided by your quality score plus .01 which gives you the actual CPC rate. See image below.

Cost per click
Google Ads Cost per click formula

As an advertiser, creating quality Ads should be one of your top priorities. This is because it helps you outrank even your competitors who have higher bids.

Google Ads consider several factors for ranking Ads which are Max bid, Competitor Ad Rank and your quality score all play significant roles in determining your CPC rates.

Cost per click
Google Ads auction ranking (Image credit: TryAdhawk)

How to improve your CPC rate and maintain high-quality score

After having an understanding of how CPC Ad work plus how CPC auction is calculated, Let’s see how you get cheaper CPC rates while maintaining a high-quality score.

It is extremely important for advertisers to maintain a high-quality score as it comes with several benefits. There are a couple of things which I will describe as a process since it’s not a one-time thing. Cost Per Click Ads requires constant optimisation.

This is what this section is all about. Please follow the stages as explained below in order to get a high-quality score and maintain it.

1. Add relevant Keywords to your Ads Headlines

Keywords are really important factors when it comes to ranking in search engines. The same way you use keywords in your content to tell search engines what your content is actually about, the same process is replicated to Google Ads.

Make money blogging

Make money blogging

When creating Ads, Using your most relevant keywords in your Ads headlines and in the description tell Google exactly the types of audience you wish to target.

This helps improve the quality score of your Ads overtime as you maintain high Click through rate (CTR).

Also, as some experts suggest, do some research on your competitor’s Ads and see the keywords they are using in order to have an idea of the kind of keywords they are using and use those as well.

Doing so will give you a competitive advantage over many of your other competitors.

2. Make a good landing Page

Consistency matters a lot when it comes to online advertising. The final destination URL placed in your Ads should have reliable, easy to understand and action buttons well placed.

The message on the ads should be consistent with what the Ads portray on your landing page or website. The advantage of this is that it leads your visitors to stay more on the page and take necessary actions such as signing up or making purchases.

The more time your visitors stay on your landing page, the better relevance and quality score your Ads will gain.

So in summary, make sure your PPC advertising message align with what you have on your landing page.

3. Group Your Ads into Smaller Targeted Ad Groups

In 2018, Google added great features that allow advertisers to group Ads based on keyword making targeting more precise.

This feature helps advertisers have a better understanding of which Ad groups based on those keywords that are performing well and the Ad groups that are not. 

See the example of Ad group in the image below

Cost per click
Google Ads Group

The data derived from each of the Ad groups makes it easier for advertisers to make decisions optimising their Ads.

It presents you the information required to pause or stop some Ads and spend more on the Ads that are performing better.

4. Add Negative Keywords

Negative keywords are extremely important for saving your Ad budget and optimising your Ad quality score which will lead to a better average cost per click.

Using negative keywords tells Google Ads platform to avoid showing your Ads when queries that contain those negative keywords are entered into the Google search bar.

The impact of this is powerful help get your Ads shown only when the right keywords matching your Ads are entered.

This makes you get more engagement based on CTR as they appear only on the specified keywords raising your overall quality score.

5. Create Targeted Ad Extensions

Google Ad extensions are designed to make your Ads more relevant and engaging. It simply gives visitors more reasons to click on your Ads while positively impacting your Ad Rank.

There are a lot of Ad extensions we can create manually such as site-links, Locations, Call-Out, Calls, messages, Sign-ups, App, Review, price, structures snippets, affiliate locations etc.

PPC Ad Google Ad Extensions

Google Ad extension has potentials to increase conversions and sales in many cases. In the end, they impact your overall Ad quality score.

6. Create Google Ads Conversion tracker

Conversion tracker is another great decision-making tool advertisers need to take advantage of it.

Conversion tracker can be easily installed through your Google Tag manager or direct installation of the code on your website or specific landing pages.

Cost per click

Cost per click advertising

Sitelink Ad Extension

Cost per click

CPC Advertising Ad extension

Callout Ad extension
Structured snippet Ad extension

The least it does is to collect data about the actions of your visitors such as Sign-ups / registration, Purchases, calls etc.

This data is then used by Google Ad to determine which people are more likely to take those actions you need.

Conversion tracking helps increase your Ads quality score as it contributes to more precise targeting and ultimately higher CTR, lower Avg. CPC.

Cost Per Click Ad Networks

Cost per click ad networks are Ad networks that use Cost per click also known as CPC. We discussed a lot about CPC Ad networks but need to also discuss Ad Networks that use CPC as a pricing model.

The most popular CPC Ad network as we discussed extensively in this blog post is the Google Ads. They simply have the largest share of CPC advertising online today.

Cheap Banner advertising

Cheap online advertising

This is simply why this post is mostly focused on discussing Google CPC advertising. Our Ad network AdsTargets a similar Ad network features like Google Ads.

Although our bidding system works a bit different from Google’s bidding system. We have a similar CPC system. Advertising on Google Ads or AdsTargets Ad network for advertisers and publishers will give you almost the same results.

AdsTargets competing advantage here is the cheap cost of advertising and automatic Ad optimisations features. you can become part of us by joining AdsTargets advertising Ad network.

Conclusion

Cost per click advertising will continue to evolve while positively and negatively affecting online advertisers. For those who are able to adapt will reap the benefits of CPC advertising while the ones that ignore it will face the consequences.

This post will be updated from time to time and we would like to know from you what you think about the post and suggest ways to make it better.

Guide to understanding Pay per Click advertising

Guide to understanding Pay per Click advertising

Pay per click advertising has been around over the last two decades and have seen a lot of transformation. 

PPC has evolved a lot basically the way PPC giants such as Google, Yahoo, Bing and Amazon has adjusted their PPC advertising tools constantly to ensure enhanced performances. 

It is always important for online advertisers to follow-up and be updated as much as possible in order to be able to run more effective PPC campaigns.

In this post, I will guide you through the process of formulating and running successful PPC or CPC campaigns.

Let’s jump into it…

What is Pay Per Click Advertising?

First things first. Let’s understand what is pay per click advertising.

Pay Per Click (PPC) advertising is also known as Cost per click (CPC) advertising it is an online advertising model used by both the advertisers and the publisher as a pricing model to sell or buy traffic.

The advertiser is required to pay for the traffic sent by the publisher which in most cases the publisher is a website owner or a group of websites inclusive of blogs.

Advertisers often buy specific targeted traffic that is relevant to their niche or market type.

Make money blogging
Make money blogging

Pay per click advertising usually send traffic through banner ads, Text ads, Interstitial Ads, In-App ads across mobile and desktop devices. Other forms of utilising PPC Advertising is through Pop-Up Ads, contextual ads, links etc.

Pay per click advertising or cost per click advertising is largely controlled by search engine giants such as Google (Google Ads), Bing and Yahoo Bing and Yahoo Ads). These search engines display these ads on their various platforms.

How PPC advertising works will be discoursed in detail below…

The image below shows how Pay per click Ads appear in Google results.

Pay Per Click advertising

Pay per click Trends

PPC trends shows the evolution process of PPC advertising. The online PPC community could testify that a lot has changed over the past years. In particular, 2018 witnessed a lot of changed in online PPC such as,

PPC Trends

Google rebrands her online advertising from “Google AdWords” to “Google Ads”. This change was accompanied by a lot of features within the systene much as creating various types of campaigns, enhancements, and targeting options making creating and targeting campaigns more effective.

Bing also followed the same way in their PPC advertising system making it more convenient to create and manage campaigns with the more efficient reporting system.

LinkedIn on the other hand also implemented profile targeting system in 2018 while Amazon has received more PPC Ad budget as advertisers noticed more products search taking place on Amazon.

How does Pay Per Click Advertising work?

PPC advertising or cost per click advertising works by using highly technical IT systems designed by various Ad Networks. Although each of these systems works differently, they all have one thing in common which is generating clicks for the advertiser.

PPC or CPC pricing model

Cost per click advertising works on two popular models which is known as the Bid-based CPC and Flat-rate CPC.

In each of the models, the advertiser’s sign’s up with the Ad publishers which in most cases is an advertising ad network.

The registration also includes an agreement which allows each advertiser to indicate or choose how much money they are willing to pay per certain keyword or keyword phrases.

The Ad network system then automatically ranks advertisers bids and show them when a quarry is entered in the search engines.

To break it down further…

Cheap Banner advertising
Cheap online advertising

For search engines such as Google, Bing and Yahoo. These Ad giants use a bidding system that allows advertisers to bid for keywords that are related to their niche or market.

The bid system works in favour of the advertiser that pays higher for a certain keyword or keyword phrases. These Ads are displayed on top or below search results.

On the other hand, websites owners or bloggers charge advertisers a fixed amount to place banner ads, interstitial ads or Text Ads within a given time frame. Ad operate in a similar way such as search engine while also they have the capability to charge a fixed amount per click as well.

Pay Per Click advertising Check list

In every project, there are set of activities which involves proper planning and management for those budget to be successful. This same ideology is applied for PPC campaigns in other to reap the full benefits of PPC advertising.

This checklist entails how the cost per click campaigns should be planned and managed Daily, weekly, Bi-Weekly, Monthly and Quarterly.

Pay per click check list
Infographic credit: Media media

Planning Pay per click

Planning your PPC campaign entails the following

Outline Key Performance Indicators (KPIs)

Budget your estimated campaign spend and approximate cost per click you expect to spend on your campaign.

Set your target for conversions and acquisitions (CPA)

Define your frequency of measuring your campaign

Daily checklist

Daily monitoring and optimization is done by checking the daily spent and the conversions.

Movers: Click through rates and changes in the cost

Bid Adjustment: Adjust Ad bids based on top performance and poor converters

Keywords adjustment: Monitor and adjust poor performing keywords

Weekly checklist

Position: Click performance top verses side

Rebalance: Refine performance anomalies

Keywords: Negative Keywords research

Mobile: Mobile bid adjustment versus desktop performance

Bi-Weekly Checklist

Impressions: Search and update missed opportunities

Ad groups: Split out, narrow and refine

Ads: Create new Ads, analyse the existing ads and pause poor performing ads

Placement: Remove or poor performing Ads

Monthly checklist

GDN: Display verses search search performance review

Quality: address low quality keywords scores

Website links: Analyse performance, Add or remove

Analytics: Search for poor visitors and fix metrics

Quarterly checklist

Landing pages: refine copy, improve conversions rates.

Geo targeting: location performance and adjust bids

Day parting: Day of the week and time of the day analysis.

Review: Historical performance analysis.

How to Calculate Pay per click advertising?

To understand how PPC or cost per click advertising is calculated is very simple. This is done by dividing the cost of advertising by the number of clicks from a particular campaign.

The formula is as follows: pay per click ($) = Advertising cost ($) / number of clicks (#). Doing so will give you an insight on how much your PPC advertising campaign actually cost.

PPC Advertising cost OR CPC advertising cost

PPC advertising cost Or CPC advertising cost is simply the specified cost of running a PPC or CPC campaign in a given period of time. These advertising cost can vary besed on when the advertisier decides to analyse their cost of advertising compared to the performance of the Ad campaign.

Types of Pay per Click Advertising

There are various forms of PPC advertising also known as CPC advertising. They come in various forms of online advertising and the most popular ones are Banner advertising also known as Banner Ads, Text advertising or Text Ads, Interstitial Advertising or full-screen Ads, mobile and in-app advertising.

The example of these PPC advertising types will be briefly discussed below as follows…

Banner Advertising PPC.

PPC Banner advertising is a form online advertising that allows advertisers to design banners with promotional information and display them on publishers channels.

Banner advertising is arguably one of the oldest forms of online advertising. It is still one of the most popular among online marketers. The reason for this is simply because they are more attractive and eye-catching for visitors.

The most popular banner sizes are the 728×90, 300×250, 160×600 and 468×60 while there are many other banner sizes. These banner sizes are also known to be most converting ads.

Interstitial Advertising PPC

Interstitial PPC advertising also known as full-screen advertising is mostly used on mobile devices to get the full attention of the visitors. They appear on full screen or mostly covers 70% of the screen with the possibility of closing them down or it automatically disappear after few seconds.

Cheap Banner advertising
Cheap online advertising

Interstitial Ads comes in various sizes. The most popular once are 320×480 and 480×320 for mobile phones while 1024×768 and 768×1024 are more suitable for tablets.

PPC Mobile advertising have grown significantly in the past five years. This is patly because of the dramatic increase in mobile use by internet users. Google reported in 2015 that mobile search surpase desktop searches made in their search engine.

This made Google and other search engines lay more emphases on mobile devices. It presented online advertisers the opportunity to target mobile users and increase their sales and ultimately profits.

Because most people carry their mobile devices with them all the time. online advertisers has also been doing their best to target mobile users while implementing various mobile Ads targeting strategies.

Text Advertising PPC

CPC Text advertising has also come a long way making it one of the oldest and the most popular form of PPC online advertising. Text ads are mostly used by Google and other search engines.

These text Ads are mostly displayed on top and bottom of google search results. Google also display PPC Text Ads on YouTube and publishers blogs and websites all over.

Pay per click advertising Agency

These are pay per click advertising Ad networks such as AdsTargets offering advertisers the opportunities to run their PPC campaigns.

Also, there are a lot of advertising agencies which helps small businesses to run, monitor and optimise their PPC or CPC Ad campaigns for a monthly feel. These are all classified as Pay per click advertising agencies.

Benefits of Pay per click

There are numerous benefits brands get from PPC or CPC adverting. Nowadays, most brands have dedicated pay per click budgets and put them to use year round. It is one of the reasons why Google makes over 100 billion dollars why Facebook makes over 40 billion dollars.

The benefits are as follows

  • PPC advertising give brands online visibility;
  • It increase their online exposure which makes impact on their off-line; exposure as well.
  • Brands that engage in CPC advertising increase their sales and conversions;
  • It enable fast growth for brands

Conclusions

We have covered pay per click or as you like cost per click here but will be very happy to know what you think about this online advertising concepts.

Suggestions with the most recent updates about PPC or CPC are welcome so we can improve the quality of this post and keep it as fresh as possible.

Guide to Ad Rates: Interstitial Ads CPM rates explained

Guide to Ad Rates: Interstitial Ads CPM rates explained

I just answered a question about Interstitial Ads CPM rates on Quora. This is actually an interesting question for me cause I get these types of questions almost every day from publishers willing to monetize their traffic or publishers who have already registered.

Similarly, Advertisers are not excluded as many ask the rates on Banner Ads rates, Text Ads rates or as many prefer to refer to PPC Ads rates, CPA Ads rates and many other Ad types.

I thought I should clear this issue or rather explain why Interstitial Ads CPM rates and other Ad types are not fixed on the majority of Ad Networks.

The fact is, There is no flat rates for PPC, CPA that runs throughout the year for either publishers or advertisers on an Ad Network.

This answer is meant to be fair to clarify this question so it can help many others. Interstitial Ads CPM rates vary across Ad networks and based on various factors. I will briefly mention those factors below

Advertising GEOs

Interstitial Ads CPM works just like any other Ad types and several things are considered as I mentioned above. Geographical location where the advertiser chooses plays an important role in the pricing of Interstitials Ads CPM rates.

This is because some geographical regions have better CTRs, CPA and conversion rates than others and this is always considered in all Ad types. Another important thing to consider is Advertising cost varies in different countries.

Even in the same country, Ad cost differently, for example, In the US, California has one of the highest costs charged for advertising than other states within the country.

Advertising cost explained

This goes for Banner Ads, Text Ads, In-App, Interstitial Ads etc. Again, Advertising cost in the US, The UK, Germany cannot be compared to the advertising cost in India, Nigeria and Ghana. Advertisers are willing to pay even more in these high-cost regions because of the benefits that come with advertising in these areas.

Income levels

Just a follow up on the GEOs, income levels in some countries and regions of various countries are different and so as taxes in those GEOs. Ad Networks consider this as a price factor. In turn, publishers are paid higher for clicks, CPA and CPI on traffic in certain regions such as the US, UK, Germany.

This same advertising strategy is applied for Banner Ads, Text Ads, Interstitials, In-App ads and other ads as well.

Ad Display device

The Interstitial Ad display device (Desktop and mobile) also plays a role in Interstitial Ads CPM rates. This again varies across Ad Networks and bidding systems employed by those Ad Networks. Mobile interstitials are more popular and mostly more effective in mobile App Advertising. In many cases, the effectiveness of the display device also influenced the cost of advertising.

Advertising time

Ad prices change based on the demand on a particular Ad which forces the bidding system to either increase or decreases the prices of ads including Interstitial Ads CPM rates.

I could actually go on and on but will leave it here and hope this helps in understanding why CPM rates are not fixed and subject to change always.

Conclusion

The cost of advertising is more complicated as many advertisers or publishers expect it to be. there are many factors that are considered by ad networks or even bloggers or webmasters selling their Ad space. If there are other factors that you consider play a role in the advertising cost that is not covered in this post, please let us know so we can update this post to be more relevant.  

How to determine advertising cost on your Blog

How to determine advertising cost on your Blog

Online advertising cost calculation can be tricky even for online advertising experts. It seems many ad publishers are finding it difficult to figure out how they should price their ads, here is the question I got this morning from a blogger “How do you determine a fair price for an ad on your website

My answer to this questions goes like this…

First of all, this was a great online advertising question which most bloggers or people willing to sell their traffic should be asking. Online advertising is always are tricky business both for online advertisers and Ad publishers.

It is even harder for Ad publishers to determine advertising cost that will be considered fair for them and to those buying the traffic. Publishers have become aware of the potentials online advertising has and want to take good advantage and the opportunities it presents by converting their Blogs or websites to Ad sites

When I received this question on Quora, I decided to answer in more details to help others understand how they can determine advertising cost on their Ad sites so it will be fair for both parties.

Here are the few but very important things you need to consider when asking for advertising cost on your blog or website.

The indicators to evaluate a fair price for ads on your website or blog should be as follows

Online advertising cost

If you have good traffic and want to monetize your traffic for a fairly high price, Use these tips and indicators to determine your advertising cost.

Eugene Agoh

GEOs

This means your traffic source by geographical location, If you have a good amount of traffic from specific locations lets say the USA, The UK, Canada, Germany or other regions that are considered as high-value traffic zones.

You should be able to charge a bit higher than someone that has traffic that is coming from other GEOs such as Vietnam or Nigeria. This is because traffic from these sources has higher conversion rates period.

The secret you should know is that All the big advertising giants like Google, Facebook, Bing, and many other Ad Networks charge higher ad prices for clicks and impressions coming from those GEOs.

On the other hand, they also pay publishers higher for clicks and impressions for their traffic coming from those GEOs.

So, GEOs are very important when it comes to determining the cost of advertising on your Ad website or Blog.

Niche

If your website or Blog has traffic that is coming from a targeted source from people with interest in a particular niche you may consider charging a fairly higher price for your ads.

This is because this type of traffic will have a higher rate of conversion and more advertisers would want to advertise on your website or blog especially if the niche is selling very well.

The perfect example of this maybe Sports traffic. If you have massive sport traffic on your website, you should understand most advertisers within this niche will be willing to pay a higher price for your traffic in most cases.

The Click Through Rate (CTR)

This is the Click through rate, You will have to try advertising your own product to ascertain the Ctr of those ads and then make your decision based on that too.

If your ads display on your website or Blog has a very high click-through rate, you should consider it as a good indicator and work with it.

What I mean by this is, Ads with high Click Through Rate are considered to be a positive sign as it shows such ads are seen by the highly targeted audience which most often leads to higher sales or conversions

The source of your traffic 

The source of your traffic may also play a key role in determining the cost of advertising on your website and by traffic source, I mean where the majority of your traffic is coming from e.g Organic traffic from search engines, Social media traffic, Traffic from email marketing etc.

Of all those traffic sources, Organic traffic may be the most unique and profitable traffic source anyone can ever get online. If you spent a lot of time doing quality SEO and at the end, you have great results, you can consider looking at the keywords you rank very on and charge approximately what Google is charging for those keywords.

That way, you will fully optimize your profit many year or months of search engine optimization you have been doing.

The Type of Ads

Now, this is where the Ad price varies. Depending on your advertising technology, If you have potentials for interstitial Ads, Banner Ads, Text Ads or even In-App ads, You should set the price based on these features.

You may consider charging more Interstitials ads these Ad types have the ability to capture audience attention more than another Ad type. You may also consider asking for a higher amount on larger banners and Text Ads depending on their appearance on your website.

The Advertising space

Here you should basically consider asking for a price based on the space they cover and the position those Ads are placed on your website.

Ads that appear on the top of your website should be charged differently because your visitors are more likely to see those ads before other content on your website.

The Cost of advertising broken down in the infographic.

Haven’t had those points, I would want us to take a look at the cost of advertising as distributed nationwide. This price is broken down to give you an approximate figure spent on advertising. It will also help you figure out how much you can possibly charge for advertising based on your niche audience size.

The Cost of Advertising Nationally Broken Down by Medium

Conclusion

I hope these indicators will help you make a good decision determining how much you can charge for advertising on your blog 🙂

Good luck with online advertising