Understanding the various analytics and metrics behind your PPC campaigns is paramount for finding success in paid Internet advertising. Cost per click, or CPC, is one of the most important metrics that absolutely can’t be ignored.
When it comes to the Google Display Network (GDN), CPC expresses how much you’re spending for conversions. Adjusting tactics to optimize for CPC can help you stretch your ad budget to capture even more conversions.
By exploring CPC completely, you can better understand exactly how this metric impacts your campaigns and how to improve it. It’s also important to look at industry benchmarks for CPC, as this helps show where other companies are at in terms of their PPC costs.
Why Does Cost Per Click (CPC) Matter?
CPC is one of the more talked about PPC metrics because it has so many implications for your campaign efforts.
A Benchmark Of Success
Many professionals use CPC as a benchmark for measuring the overall health and performance of their campaigns. For PPC marketers, both new and old, measuring the success of their efforts is a challenge in itself.
CPC is a great measure for success because it expresses how much you need to spend to gain a click, and clicks lead to more leads and conversions.
Directly Impacts Other Key Metrics
If your CPC is particularly high, then you’re spending more for each click, which damages the value of each conversion and your overall return on ad spend. In this respect, CPC really has a big impact on your other important metrics.
It directly affects your budget! If you are overspending on clicks, then you aren’t spending your PPC budget wisely.
Keyword & Bidding Optimization
One of the most important components of successful PPC marketing is optimizing your list of keywords. When measuring keywords, you always want to look at two measures: how much it costs and what is the value. When you find display opportunities that have high value, at a low cost, it is a big win.
To measure the value, we look at things like user intent or search volume. Cost, on the other hand, is expressed by CPC.
Average CPC for Display Ads Across Different Industries
It’s not always easy to tell if you’ve achieved a “good” CPC or not. What is considered a good CPC for your business, may not necessarily be the same for other companies. In other words, the average cost per click benchmark changes depending on the industry.
That said, if we were to pull an overall average, it’s about $0.63 on the GDN, according to a survey by WordStream. This report also found that dating websites experience the highest CPC on the Display Network, with a whopping $1.49; that’s over twice the average! B2B companies, consumer services, and finance/insurance businesses also have relatively high click costs.
Meanwhile, travel/hospitality, education, and technology industries have the lowest average CPC for display ads.
These CPC benchmarks allow companies to see whether they are below or above the average for their business type. If your company is spending well above the average for your clicks, then there may be something wrong with the targeting options that is causing you to shell out big bucks.
Remember, these are just approximate numbers from a single report. The number changes from year-to-year and vary by source. Another report from AdStage found that CPC ratings for the Display Network are actually $0.75 per click. What these benchmarks provide is a somewhat accurate range of where your CPC should be.
You can get a more detailed picture by investing in a PPC competitor analysis solution. This tool will use data signals to make informed guesses about your competitors’ click costs. Again, it isn’t a concrete number, but it will show you how much your direct competitors are approximately spending on their clicks.
Tips For Improving CPC
Understanding these benchmark averages is a great way to see how your strategies rank against the norm. If you’re below this norm, it’s a clear signal to hit the grindstone and begin plugging away at improving this important metric.
But, don’t let a better-than-average CPC be an excuse for you to slack on your PPC duties! You can, and should, always be taking steps to improve your key PPC metrics, CPC included.
Here are three tips for improving your CPC.
Take Advantage Of Display AdBuilder
There’s an inherent visual element that the word “display” evokes. Yet, so many PPC marketers on the GDN fall short of creating visually appealing ads. Instead, they rely heavily on text-based ads that don’t draw attention.
You don’t have to be an outstanding graphic designer to create visual ads on the display network. Google actually has an intuitive tool available to help. Display ad builder will pull images from your website and create branded ads to be used on the network. It does almost all the work for you.
By enhancing the visuals of your ads, people that click will have a better grasp of your company and its brand.
Nix Mobile Apps
A lot of PPC marketers sink a lot of wasted money into ads that display inside of apps. The problem with this is that in-app ads are disruptive. They interrupt whatever the user is doing within that application. Most clicks that resonate from these ad displays are accidents and the user quickly skips back to their app.
This can wreak havoc on your CPC! So, be sure to disable mobile app displays, unless you have a specific reason for wanting to target app users.
A PPC professional is never at rest. One of your main priorities is determining areas where you are spending too much and not receiving an acceptable amount of value in return. By examining areas where your CPC is high, but value is low, you can quickly and efficiently detect the problems that are causing poor cost per click optimization.
The PPC environment is very dynamic by nature. Average CPC for display ads is always changing. Staying on top of your CPC metrics will better guarantee that you’re making the most of your ad budget.