Ad Model Case Study

CPC
What does CPC mean?
Cost per click (CPC) is a method that websites use to bill based on the number of
times a visitor clicks on an advertisement.alternative is a CPM, which is the
number of impressions, or viewers, in thousands, regardless of whether each
viewer clicks on the advertisement or not.
For example, a website that has a CPC rate of 10 cents and provides 1,000
click-throughs would bill $100. The amount that an advertiser pays for a click is
usually set either by a formula or through a bidding process.
The trade-off between CPM and CPC is if your ads do happen to perform well and
you get a high click-through rate (CTR), and you’ll pay for each and every click,
which can add up to big bucks FAST.
How to calculate of CPC?
CPC bidding Campaign
Cost-per-click (CPC) bidding means that you pay for each click on your ads. For CPC bidding
campaigns, you set a maximum cost-per-click bid - or simply "max. CPC" - that's the highest
amount that you're willing to pay for a click on your ad (unless you're setting bid adjustments, or
using Enhanced CPC).
● Yours max. CPC is the most you'll typically be charged for a click, but you'll often be charged
less -- sometimes much less. That final amount you're charged for a click is called your actual
CPC.
● If you enter a max. CPC bid and someone clicks your ad, that click won't cost you more than
the maximum CPC bid amount that you set.
● You'll choose between manual bidding (you choose your bid amounts) and automatic bidding
(let Google set bids to try to get the most clicks within your budget).
● CPC pricing is sometimes known as pay-per-click (PPC).
CPM VS CPC : How to choose one?
Ad ONE – Paying on a CPC basis ($1 per click): 10,000 impression and 40 clicks costs $40
(CPC=$1)
Ad TWO – Paying on CPM basis ($3 per 1,000 impressions): 10,000 impressions and 40 clicks
costs $30 (CPC=$0.75)
In the above example, both campaigns have received the same amount of impressions and clicks.
They have a CTR of 0.40% which is quite good for display advertiser (but terrible for search
campaigns).

The Cost Per Click campaign costs more in total however and actually costs more per click. This is
even though you are paying three times as much for CPM as CPC – which is a reasonable ratio.
If the CTR was higher, the CPM campaign would actually be even better value. Therefore when
you start out advertising and have a low CTR you should use CPC ads, but move to CPM
advertising when your CTR gets higher. Use our Cost Per Click Calculator below to get started.
Pricing in India(UP) for google:
Pricing varies for every website, for different locations(even in India), for different
time, for different sectors etc.
Resources:
Cost Per Click (CPC) (investopedia.com)

CPC Calculator (Cost Per Click) | The Online Advertising Guide

Cost-per-click (CPC): Definition - Google Ads Help

Maximum CPC bid: Definition - Google Ads Help

Actual cost-per-click (CPC): Definition - Google Ads Help