Are Pay Per Click and Cost Per Click the Same?

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Are Pay Per Click and Cost Per Click the Same?

Pay Per Click (PPC) and Cost Per Click (CPC) are often confused with many using the two interchangeably, but while they are very similar, they have different meanings to digital marketers.

In order to understand digital marketing, you need to understand this jargon, helping you to grow your business online. Both PPC and CPC can help you reach millions of potential customers throughout the world via the internet. You can earn a good return on investment with the potential to earn $2 for every $1 spent.

What is Pay Per Click?

It is important to start with the basic understanding of what pay per click and cost per click are. Pay per click marketing is very common in the digital advertising world, used to drive traffic from search engines, such as Google, helping you increase your online sales. This advertising models uses adverts on third party websites, social media platforms, and search engines.

Are Pay Per Click and Cost Per Click the Same?
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The great benefit of pay per click advertising is you only pay when a user clicks on your advert to find out more. PPC ensures your adverts are shown to people who meet your target audience in terms of demographics and area, increasing your chances of making a sale. 

Google is the favourite when it comes to pay per click advertising, generating over $130 in advertising revenue. This number is climbing, which is why most advertisers will turn to Google Ads when it comes to their PPC campaigns.

Google is considered the largest provider of PPC marketing services, as the company generates more than $134 billion in ad revenue. 

What is Cost Per Click?

Cost Per Click, on the other hand is part of PPC advertising and is a financial metric representing how much you pay for each click on your campaign. CPC is used for certain keywords you have selected, or it can be applied to your entire advertising campaign. 

Understanding the Difference

While pay per click and cost per click are used together in marketing campaigns, they are not the same. PPC is paid advertising where advertisers pay an amount when someone clicks on their advert, while cost per click is a financial metric used to measure the cost of advert clicks within your campaign. 

How Does Pay Per Click Work?

Pay per click covers a variety of advertising platforms on the internet with the most common being Google Ads. You can choose a number of formats including Search Ads, Shopping Ads, Video Ads, and more. Most businesses will start with Google Ads, as this search engine already dominates the search engine industry, offering you the largest audience on the internet.

It doesn't matter what platform you select for your pay per click advertising, the process is similar. A user does an online search and immediately a quiet auction takes place behind the scenes, identifying which adverts should appear on search engine results pages (SERPs), along with how much each click will cost for the adverts being displayed.

The auction process includes:

How does Cost Per Click Work?

Once your PPC campaign is up and running, you will use CPC to measure and maintain the efficiency of your advertising campaigns. The more clicks that come to your advert, the cost per click starts decreasing, this shows you your advertising campaign is successful.

There are a number of factors to determine how much the CPC is of your advertisements, such as:

Conclusion

Pay per click and cost per click are often confused and while they are both important parts of an online pay per click advertising campaign, they are different. Your Pay Per Click advertising campaign will drive traffic to your website, while cost per click is what is used to determine how effective your adverts are. The more effective your adverts, the less your cost per click will be.

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