CPC
CPC (Cost per Click) is a model of online advertising where the advertiser only pays the host site for the total number of clicks during the ad campaign. The link may come from PPC advertisements or even organic listings from SEO.[1]
Short Overview
In the case of banner advertisements, CPC is the price paid by the advertiser based on visitors' clicks of advertisements which lead to his website. The terms pay-per-click (PPC) and cost-per-click are sometimes used interchangeably, though they can have a different meaning. The difference between these two advertisement methods is that PPC indicates payment based on clicks while CPC indicates the measurement of cost per click based on contracts.[2]
A "click" represents an individual visit by following a link or advertisement, expressed as an interaction with the company's products and services. Every click expresses one's attention for that business/website based on the search criterion set by each person.
The importance of CPC
Based on the results of the CPC campaign the financial outcome is being determined. The more clicks, the higher the profit. Having this in mind, when developing a CPC campaign the main objective should be profit maximization by means of maximizing the return on investment. When thinking of CPC campaigns it is important to take into account both the costs and the value associated. In order to achieve maximum profit the costs should be minimum while the value should be as large as possible.
CPC versus PPC
Even if these two models are sometimes used as synonyms, there is an important distinction which must be taken into consideration. The Pay per click (PPC) model is an online advertising model used on websites where advertisers pay only when an advertisement is clicked. Considering search engines, advertisers usually choose specific keywords which are relevant for their target market. In the case of PPC campaigns, it is usually used a fixed rate per click. As compared to PPC, the Cost per click (CPC) model represents the sum paid by an advertiser to search engines and various other Internet publishers on the basis of a single click, which has the purpose of directing the visitors to the advertiser's online website.[3]
CPC versus CPM
A website using CPC campaigns would bill based on the number of times a visitor clicks a banner as compared to the number of impressions in the case of CPM. Cost per click (CPC) is often used when advertisers have to reach a daily budget and once this is achieved the advertisement is then removed.[4]