What is a Good CPC? Learn How to Optimize Cost Per Click for PPC Success

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What is a Good CPC? Learn How to Optimize Cost Per Click for PPC Success

02/04/2024 5:20 PM by Admin in Ai tools


What Makes for a Good CPC and How to Achieve It

 

what is a good cpc


Pay-per-click (PPC) advertising is a crucial part of many digital marketing strategies. However, managing campaigns for optimal cost-per-click (CPC) is equally important for success. The question is - what CPC should you aim for, and how can you get it as low as possible?

Defining the right CPC target for your business and constantly optimizing to reach it takes work. But it pays dividends for your bottom line. This comprehensive guide examines exactly how to unlock a "good" cost-per-click for PPC excellence.

 


Understanding Cost Per Click and Why It Matters

CPC refers to the amount you pay each time someone clicks your PPC ad. For example, a CPC of $1 means every ad click costs you $1. Your total PPC ad spend is calculated by multiplying CPC by the number of clicks received.

Lower CPC = more clicks and visibility within budget. Higher CPC = fewer clicks draining your advertising dollars quickly. That's why every business wants a good (lower) CPC.

But there's more nuance when defining the right CPC for your strategy. You want to maximize clicks from interested audiences without superfluous spending. The ideal CPC varies by industry, keyword competitiveness, profit margins, and more.

 


Benchmarks for Good vs. Bad CPCs

CPC itself doesn't tell the full story. You need context around keywords and industry competitiveness.

Here are some benchmarks for good vs. bad CPCs:

  • Under $1 - Great for uncompetitive, low-commercial intent keywords. This can indicate a poor quality score.
  • $1 - $3 - Average CPC for many industries like service-based businesses.
  • $3 - $5 - Slightly elevated, often seen for competitive keywords. Can work given high conversion rates.
  • $5 - $7 - Borderline is expensive, and requires highly tailored ads and landing pages to justify.
  • $7+ - Very high, usually not sustainable long-term without exceptionally high-profit margins.

However, ideals differ drastically based on your profit margins and customer lifetime value:

  • Low-ticket products - CPC under $3 usually needed for profitability.
  • SaaS or professional services - Can warrant mid-range CPC of $3 to $7 with recurring billing, and longer sales cycles.
  • High-ticket services - Higher CPC of $7+ viable if commanding $1000+ in revenue per customer.

You must define CPC targets relative to your business model and vertical.

 


Tips and Strategies to Improve Your CPC

Achieving a good CPC requires heavy optimization and constant vigilance. Here are proven tactics:

Thorough Keyword Research

Analyze keyword difficulty, competitiveness, commercial intent, and past performance to guide your CPC targets. Match CPC bids to customer conversion value.


Create Highly Targeted Ads

Optimize ads for relevancy to each keyword and searcher intent. Include compelling callouts focused on your offering. Tailored ads improve click-through rates and lower CPC.


Develop Landing Pages That Convert

Make landing pages consistent with ad messaging, easily scannable, and designed to convert visitors into leads. Quality landing experiences improve conversion value per click.


Set Granular Bids

Avoid blanket bidding. Instead, set specific bids for each keyword based on competitiveness, past performance, and your targets. Adjust bids frequently.


Use Negative Keywords

Add negative keywords like misspellings, broad terms, and unrelated searches to exclude unqualified traffic. This filters clicks to reduce average CPC.


A/B Test Ad Copy & Placements

Test different versions of ad copy, design, headlines and placements. Analyze performance data to double down on what drives desired actions at the best CPC.


Monitor Metrics and Optimize

Dig into performance reports frequently. Pause poorly performing elements and strengthen what works. Be ready to adjust bids, copy, landing pages, and more to hit goals.

 


What Makes a “Good” CPC?

what is a good cpc

There is no universally agreed upon CPC that is considered “good” or “bad” by default.

The right CPC depends on:

  • Competitiveness of the keyword
  • Commercial intent behind the search query
  • Your profit margins and revenue potential
  • Overall conversion rates on your site
  • Ability to recoup CPC cost from customer lifetime value

A $7 CPC might be unsustainably high for a blogger selling ebooks, but excellent for a SaaS company landing $2000 clients from paid ads.

You must define your target CPCs based on your vertical, margins, and conversion process.

 


Key Takeaways for Unlocking a Strong CPC

  • Research ideal CPC relative to profit potential for each of your keywords.
  • Write tightly targeted, conversion-focused ads.
  • Develop landing pages that convince visitors to convert.
  • Use negative keywords and match CPCs to keyword intent.
  • Set specific bids for each keyword.
  • Regularly A/B test ad copy and placements.
  • Analyze reports to identify optimizations for better CPC.

With rigorous optimization and ongoing tweaks, you can maintain strong PPC performance and click efficiency even as campaigns scale up.

 


Frequently Asked Questions about Managing CPC

Q1: What’s a good cost-per-click benchmark for Google Ads?

A: For AdWords, a good CPC generally ranges from $1 to $5 on average. However acceptable CPC varies drastically based on keyword and industry. Manage campaigns closely to maximize conversions.


Q2: What is a good cost per click for Facebook advertising?

A: Experts recommend keeping Facebook CPC under $1 for the best results. Use detailed targeting, testing, and landing page optimization to maintain sub-$1 CPC.


Q3: How important is getting a low CPC vs conversions?

A: Prioritize conversions and ROI rather than purely low CPC. Poor-performing keywords can have very low CPC but no conversions. Focus spending on clicks converting to sales.


Q4: Does low CPC always mean a keyword is bad?

A: Not necessarily. Very low CPC can mean low competition and intent. But it also could indicate irrelevant traffic and wasted ad spend if conversions are poor. Assess performance holistically.


Q5: What can I do to decrease my CPC?

A: Key strategies like negative keywords, super-targeted ads, lower initial bids, landing page optimization, and A/B testing will help improve click quality and lower average CPC.


Q6: How often should I review and adjust bids to improve CPC?

A: Check search term reports at least every 2-3 days for high-performing keywords to raise bids on. Reduce bids for poor-performing terms monthly or when CPC trends are too high.

 


Conclusion

What constitutes a "good" cost-per-click varies widely based on your business model, industry, profit margins, and ability to convert clicks into revenue. While extremely low CPC under $1 can look attractive initially, it may indicate irrelevant traffic. The key is balancing click volume with conversion value.

Set reasonable CPC benchmarks based on your vertical and profit potential per customer. Then use ongoing optimization strategies like granular bids, targeted ad copy, landing page testing, and bid adjustments to achieve your goals. Regularly analyze performance data to identify opportunities to improve click quality and conversion rates.

With rigorous management, you can maintain strong PPC performance at a sustainable CPC. Target the right searchers, give them a compelling reason to click, and make your landing pages worth the cost-per-click. This approach will maximize your advertising ROI long-term.

 


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