Media Buying and Inbound Marketing Blog

Is Cost per Click Part of Your Online Advertising?

By Jane Peters on October 19, 2012 |

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Online advertisers are constantly looking for new ways to advertise their products and services. Search Engine Optimization(SEO), Sponsored Search, Social Media and Affiliate Marketing are some of the options available for business owners to advertise their companies and increase their visibility and conversions.

The most popular tools are paid searches. Let's look at the two most popular kinds of online advertising, Cost per impression also known as Cost per Mille (CPM) and Cost per Click (CPC).

It is important you understand paid search. It is an advertising tool where a fee is paid. Paid searches allow you to place ads that are highly visible without spending the time needed to naturally or organically obtain first page results.

Ads usually appear at the top of search engine pages or on the side of the search results. It is a cost effective and fast way to increase traffic to your website.

Under the Cost per Click model, payment is due for every ad that is ‘clicked.’ In other words, you only pay when one of your ads leads a potential client directly to your website or landing page.

The most obvious reason for selecting a CPC bid is that you are only charged when people click on your ads. You could get thousands of free impressions from searchers that don't click through but see the ad on the search pages.

When using paid search, you want to pay for ads that generate results. When you have a low budget ($10 a day or even $20) and you don’t have time for optimization, your best bet is to just go with CPC.

The price for this service varies. One of the key benefits of advertising via CPC is the ability to bid for ad placements. This allows you to customize your advertising budget as well as select the time and placement of your ads. Bidding for popular search terms can be aggressive, but by selecting unique and relevant words, you can advertise for a relatively inexpensive cost per click.

Cost per impression is different than CPC. Just like traditional advertising, the display of an ad (impression) is nothing more than a single appearance of an ad. Viewers are not required to take action, for example click the ad, in order for payment to be due.

Banners or other advertisements are placed, according to the terms of a contract.  Payment is typically based on a predetermined number of impressions, generally set at 1000, thus naming it Cost per Mille. (thousand)

While advertisers are paying for each instance of the advertisement, it is generally less expensive than Cost per Click. Advertisers are drawn towards CPM because of the enormous amount of visibility it can bring.

One client bought a CPM schedule from a radio station that promised 400,000 impressions.  That sounded great, but the reality was they only received 9 clicks (CTR). The results were more than disappointing considering the budget.

An ad is seen often even when the ad itself is not clicked.  Some marketers believe that the ad is still read and that exposure counts over the long run. If the ad is attractive and grabs attention, the Click Through Rate (CTR) will be high.

You should consider paid search as part of your media strategy.  It can be a fast and efficient method of advertising your business. 

Remember, CPC or CPM is only part of a well-coordinated Internet Marketing Strategy that includes Search Engine Optimization (SEO) to generate organic listings and Social Media Optimization (SMO) to generate publicity and public relations.

If you aren’t spending a lot of money on ads, and you are new to paid search ads, your best bet is to bid on a CPC basis. This allows you to hedge against your exposure to low performing ads. Also, the real test is determining how to maximize your click through rate (CTR) with your ads.

Want to learn more about how Media Management Services, Inc. can help you maximize your paid search budget?  Click the button below.

                                          How to Utilize CPC  for  Your Online Advertising

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