The kinds of CPC values in Adwords

There are different kinds of CPC values in your Adwords account. Each of them has a different meaning and purpose. That’s why it’s better for you know, what they are used for and how.

So, as a publisher in Google Adwords system, you have already faced with maximum CPC value. It’s a pretty simple indicator, which shows us the limit of expenses for an ad, set by an advertiser (by ourselves). It shows us the maximum amount of money we are ready to spend for a click. It’s also a useful tool if you’d like to manage your ad campaign wisely and set, for example, the probably maximum value of one possible customer.

But the reality is that you won’t get all of the clicks for the maximum bid. It’s more likely for you to get each visitor for a smaller price, that’s why you’ll save some part of your ad budget for sure. Here is where the actual CPC value comes. It’s used to estimate, what was the actual average price for each customer that visited your website. If you also know your average CTR (click-through-rate of the ad), you can count the real profit, earned with each advertisement block you have.

Contextual advertising specialists advise to control either a maximum CPC on each of your ads, or an average CPC on all of them. These parameters can really show you, whether you gain or lose your money with a certain campaign.

What is CTR needed for?

Along with CPC, there is also another parameter, which is called CTR. What it is used for and which role it plays in your advertising campaign, will be discussed in this article.

So, CTR is a click-through-rate is an indicator for the ratio of people, who visited your page and of visitors, who’ve made a click on the ads. It shows how clickable advert on your page is. CTR is measured in percents.

Let’s take a simple example to show you, how it works. Let’s imagine, that our website was visited by 100 of people.  2 of them clicked on an ad, placed in the header. It means that your website CTR is equal to 2%.

Actually, 2% CTR on practice seems to be pretty high. It shows either high relevance of an ad to the content of your website or some manipulations with ad and traffic, made by a webmaster. Some of them are not prohibited by rules (like placing an advertising, which ideally suits your website design). Another example of manipulations is fraud clicks. They are detected easily (your Adsense account will be suspended if they were).

You should also pay attention to different ads CTRs. The practice shows, that 3 similar adverts can have different ratio. The reason for this is pretty simple: you should change the position of an ads with the lowest CTR.

Another tip is in the quantity of ads. If you need higher CTR, you should put just 1 or 2 ads on the page. If you’ve got more ad blocks on the same page, they get more impressions with the same amount of clicks, which brings the lower CTR.