CPC and PPC are two of the most popular acronyms in digital marketing. They are strictly related to online advertising and… to each other. Going further, we can say that CPC doesn’t exist without PPC. So, what do they actually mean, and why is it so important to understand the difference?
At the beginning, let’s note that, according to Hubspot, 90% of Internet users see Google Ads, which are PPC ads. What’s more, Wordstream reports that 96% of Google’s income comes from Google Ads. These stats clearly indicate that PPC is a powerful digital marketing and business instrument, which nowadays is even more efficient than other forms of advertising.
But… where is CPC in all of this? CPC is a crucial measure in PPC ads.
To make both concepts clear as a day, even for newbies, we prepared this comparison, where we define these terms, list differences, give use cases with examples, and mention benefits. Do you find yourself among those 46% of people who are confused with PPC and CPC(as stated by HubSpot)? Read on, and you will be one step closer to becoming a PPC guru!
Key takeaways:
- While PPC (Pay Per Click) is a strategy where advertisers bid to display ads and pay when clicked, CPC (Cost Per Click) is the actual cost incurred for each click within that PPC model.
- In PPC campaigns, advertisers set a budget to control their overall spend. CPC affects how quickly that budget is used, as a lower CPC allows more clicks within the same budget.
- PPC involves different bidding strategies (like CPA or ROAS) to achieve goals. CPC is directly influenced by these bids, where higher competitiveness for keywords may result in a higher CPC.
- While PPC optimization targets overall elements like ad copy and targeting, CPC optimization specifically aims to lower the cost per click without sacrificing ad performance, leading to more cost-effective campaigns.
Let’s dive into it more deeply!
What is PPC?
PPC (or Pay Per Click), is an online advertising model where advertisers pay a fee each time their ad is clicked. It’s a way of buying visits to your website rather than trying to earn those visits organically through SEO.
To understand the concept of PPC, you must be fully aware of the differences between the two types of results displayed on search engines like Google: sponsored results (“ads”) and organic results. Let’s say you are searching for a “business attorney”. Here is how the top of the search results page may look like once you type this phrase in Google and click “enter”:
The first two positions are sponsored items. This means someone paid Google to display their ad at the top (or in other exposed places) of the search engine results when someone searches for specific terms (in this case, “business attorney”).
If you, however, scroll down, you’ll see something like this, which are organic, so unpaid results:
No one paid to display their ads in this place. These results are ranked and displayed automatically, based on Google’s SEO algorithms.
Not so complicated, right?
And the last remark: sponsored search results don’t have to be displayed in one specific form (e.g., as textual items). Sometimes, they are presented as lists or so-called display ads, which typically include images, prices, ratings, etc. Just take a look below:
All of these offers are sponsored search engine results.
You can think of pay-per-click advertising as a shortcut to get your content or products in front of potential customers quickly. The most common platforms that use it are Google Ads, Bing Ads, and social media channels like Facebook, Instagram, and LinkedIn.
How Does PPC Work?
PPC works through a bidding system where advertisers compete to have their ads shown to users searching for certain keywords. I’ve prepared a simple breakdown of how it works along with some professional tips, that may be useful once you try to establish your own PPC campaign.
1. Keyword Targeting and Selection
First, advertisers choose specific keywords that are relevant to their product or service. These are the words and phrases that people are likely to search for when looking for what you offer.
Example keywords? “Bicycles”, “cheap bicycles”, “cycling gear pro”, “electric bikes shop in New York”, etc.
Keywords are usually identified via professional tools like Google Ads (previously: Google Adwords),
Pro-Tip: Sometimes, the most popular keywords are not the best choice (even if they seem like a perfect match), as they are often targeted by large companies willing to pay substantial sums to rank for them (meant to be displayed on these phrases). It’s very hard to compete with them if you have a limited budget.
2. Ad Creation
Next, once you have chosen keywords, you create ads that will appear when someone searches for them. Ads typically include a headline, description, and a link to your landing page (or landing pages).
3. Bidding Strategy
Third, you must set a bid amount, which is the maximum amount you’re willing to pay per click. You’ll compete against other advertisers bidding on the same keywords. The highest bid doesn’t always win; platforms like Google Ads also consider factors like ad quality and relevance.
Pro-Tip: Adjust your bids based on factors like device, location, or time of day to maximize your ad’s performance without increasing your overall budget. Begin with manual bidding to gain insights into performance and costs, then gradually move to automated strategies.
4. Ad Placement
Fourth, if your bid is successful, your ad will appear in the sponsored section of search results, online platforms (particularly, social media platforms), or on websites that show ads. The position of your ad is influenced by your bid and how relevant your ad is to the user’s search.
5. Pay Per Click
Lastly, you pay the set amount each time someone clicks on your ad. The goal is to make sure that the clicks lead to conversions, like purchases or sign-ups, which means you’re getting value for the money spent on advertising.
PPC can be a powerful tool for driving traffic, generating leads, and boosting sales quickly. It’s easy to track and measure, so you can see exactly how your ads are performing and adjust your strategy for better results.
What is CPC?
CPC, or Cost Per Click, is an online advertising metric that represents the amount advertisers pay each time the ad is clicked. It’s a key component of Pay Per Click (PPC) advertising campaigns, commonly used on platforms like Google Ads and in social media marketing. CPC helps advertisers control their costs by paying only for direct engagement from potential customers rather than just ad views.
How Does CPC Work?
CPC works through a bidding process where advertisers compete to have their ads shown for specific keywords. You set a bid amount, which is the maximum you’re willing to pay per click. When someone clicks on your ad, you pay the current CPC rate, which can vary based on factors like keyword competition, ad quality, and relevance. The goal is to optimize your CPC to get the most clicks at the best price, ensuring a cost-effective ad campaign.
Sometimes, CPC is used to measure a cost of average click collected within a whole PPC advertising campaign. Then, it’s calculated with the following formula:
where,
TCC (Total Cost of the Campaign) is the total amount of money spent on your advertising campaign during a specific period. It includes all the expenses associated with showing your ads,
TNC (Total Number of Clicks) is the total number of times users clicked on your ads during the same period.
The formula calculates how much you are paying, on average, for each click on your ads. For example, if you spent $500 on your campaign and received 250 clicks, your CPC would be $2 per click ($500 ÷ 250).
This metric helps you understand the cost efficiency of your ad campaigns, allowing you to adjust bids, keywords, and targeting to lower costs while maintaining or increasing clicks.
5 Key CPC vs PPC Differences
While these terms are often used interchangeably, there are a few key differences between CPC (Cost Per Click) and PPC (Pay Per Click), especially with respect to their definitions, usage in campaigns, budget management, bid strategy and performance optimization. Let’s discuss shortly all of them to give you a grasp of field knowledge about paid advertising. With this in mind you’ll also avoid common misunderstandings around the subject.
Definition and Scope
PPC (Pay Per Click) is a broader term that refers to an entire advertising model where advertisers pay each time their ad is clicked. It’s essentially the strategy of buying visits to your site rather than earning them organically.
CPC (Cost Per Click), on the other hand, is a metric within the PPC model. It represents the actual cost paid for each click on an ad. While PPC is the overarching strategy, CPC is the specific amount paid per click within that strategy.
Usage in Campaigns
PPC campaigns are designed to drive traffic and conversions, utilizing various formats such as search ads, display ads, and video ads. Marketers set up these campaigns to reach specific goals like increasing sales, generating leads, or boosting brand awareness.
CPC, however, is a performance metric used to measure the cost efficiency of these campaigns. It helps advertisers understand how much they are paying for each interaction and allows them to adjust their bids and budgets accordingly.
Budget Management
In PPC, advertisers set a budget for their campaigns, which dictates how often and where their ads will appear. This budget controls the overall spend, ensuring that the ad doesn’t exceed a certain amount within a given period.
CPC specifically impacts how quickly the budget is used up. A lower CPC means more clicks can be achieved within the set budget, maximizing the number of visitors to the site. A high CPC, however, can quickly deplete the budget, limiting the reach and impact of the campaign.
Bid Strategy
PPC campaigns often involve various bidding strategies, such as maximizing clicks, targeting a specific cost per acquisition (CPA), or focusing on return on ad spend (ROAS). The bid strategy directly influences how ads perform and at what cost.
CPC is directly tied to these bids. For instance, if you’re bidding on competitive keywords, your CPC might be higher because you’re competing with other advertisers. Optimizing your CPC helps control costs and improve the efficiency of the overall PPC strategy.
Performance Optimization
In PPC, performance is optimized by adjusting various elements such as ad copy, targeting, and bidding strategies to improve results. The goal is to maximize clicks, conversion rates, or other desired actions at the lowest possible cost.
CPC plays a crucial role in this optimization. By closely monitoring and lowering CPC, advertisers can reduce costs while maintaining or increasing ad performance. Lower CPC means you can get more clicks without increasing your overall spend, leading to a more effective campaign.
As you see, there is a strong connection between PPC and CPC. More specifically: CPC is one of the key indicators in PPC marketing campaigns. Actually, the concept of CPC doesn’t exist outside these campaigns.
Are PPC and CPC the Same Thing?
No, PPC and CPC are not the same, but they are closely related terms in digital advertising. PPC is an advertising model where advertisers pay a fee each time their ad is clicked. It’s the overall strategy used in platforms like Google Ads, Facebook Ads, and other paid advertising channels. CPC (Cost-Per-Click) refers to the actual price you pay for each click in a PPC campaign. It is a metric that measures how much an advertiser spends on each click and helps determine the efficiency of the advertising spend.
In simple words, PPC is the advertising method, and CPC is the metric that measures the cost per individual click within that method.
What is the Difference Between CPC and PPC in Google Analytics?
In Google Analytics, PPC doesn’t directly appear as a metric but is used as a term to describe traffic coming from paid advertising sources (Google Ads, Facebook Ads, etc.), while CPC is a metric that represents the actual amount paid for each click on your ad. It shows the cost-effectiveness of your advertising spend by calculating the average cost of each click your ad receives.
CPC may be presented in different ways depending on how you set up your GA4 account and dashboards. Here is an exemplary chart presenting the average CPC juxtaposed with sole clicks, impressions, and overall cost:
How Do CPC vs PPC Differences Impact Your Landing Page Performance?
The differences between CPC and PPC impact landing page performance by affecting ad costs, targeting strategies, and overall campaign optimization. There are several dependencies worth noting:
- A lower CPC allows for more traffic within the same budget, providing more opportunities to convert visitors.
- Well-optimized PPC campaigns drive relevant traffic to your landing page, but success depends on the quality and relevance of the landing page experience to improve conversion rates.
- A good landing page can improve Quality Scores in Google Ads, thereby lowering CPC and enhancing ROI.
Understanding both CPC and PPC helps refine strategies for budget efficiency and better conversion outcomes.
Optimize Your PPC Campaigns with Landingi
Now, you are at least one step closer on the way to fully understanding how pay-per-click advertising actually works and what makes it effective. If you decide to continue learning, there is no better way to launch your own PPC campaign and get some practice. You can start even with a small budget by setting minimal bids. What will you need? Basically, only Google Ads account, ad content, and landing pages, which are usually final destinations for users clicking on your ads.
In Landingi you can easily build landing pages for your PPC campaigns. You can do it from scratch or based on over 300 predesigned (yet, fully customizable) templates. You have at your disposal also a bunch of data-driven optimization tools, which can help you increase your ad Quality Score in Google Ads improving CPC and overall performance of your paid campaigns. Here are the most praised ones:
- EventTracker shows you how users behave on your pages, where they click, what elements are of their highest interest, what their scroll rate is and so on. With these insights, you’ll be able to identify also their pain points and optimize the page accordingly for higher conversions. No need for guesswork!
- On the other hand, with AI Writer you will create personalized copy tailored for your target audience, which is typically more effective than typical marketing cliches. The tool provides automatically generated messaging for your pages based on some essential information provided. A few quick tweaks to nail it and voila!
- Finally, with Landingi’s new translation feature, you can automatically translate your landing pages into various languages. If your audience is global or multilingual, they can be presented with content in a language of their preference. This increases your page relevance, user-friendliness, and the likelihood of conversion as well!
Enough words from my end. It’s time for your deeds… Try Landingi yourself for free, create your first landing page, connect it to your paid campaigns, gather essential data, and optimize for better performance to lower CPC and boost conversions. Good luck!
