Why CPC is So Important to a PPC Campaign

The price you set as your highest CPC can sometimes be the determining factor whether your pay per click campaign is going to be a success or not. The main reason advertisers use PPC is because it will make them money. The traffic they have paid for using PPC will produce a profit cancelling the cost of their PPC campaign. Therefore, it is important to get the price of your campaign’s CPC  right if you want to make a profit. The problem is that different CPCs will have different impacts to your campaign. You need to decide what CPC you need to implement into your campaign for maximum performance and profit.
 
In PPC, there are two main approaches you can have to choosing the price of your CPC being a high and low CPC. But, before you read one, you need to know the CPC of the keywords you are bidding for. Otherwise, you won’t know what is a high or low CPC for that keyword. You can do this through using Google’s Keyword Tool.
 

High CPC

A high CPC for keywords will ultimately provide you the most short term and quickest traffic. You are outbidding every other advertiser in your market for that keyword. Therefore, you will always gain the first ad placement on websites which will consequently produce the most amount of clicks. However, there are some drawbacks to using a high CPC for your keywords:

• Click Fraud – By being the first advert to be displayed increases the chances of click fraud on your campaign decreasing its effectiveness in general. The majority of click fraud happens on the highest placed advert because 1) It’s closest towards links such as the article’s title and 2) Publishers know its the advert which will have the highest CPC and make them the most money.
• Expensive! – From having the highest CPC will mean that your budget will decrease at a rapid rate. This makes clear that you should only ever use a high CPC when you want traffic quick. Otherwise, it can burn quite a bad hole in your pocket.

Low CPC

Having a low CPC will produce a completely opposite strategy as to having a high CPC. With the campaign being more cost efficient, you will be able to afford to undergo a strategy for long term traffic. However, in doing so, there will be some drawbacks:

• Low Traffic – If you make your CPC too low, you will never outbid any other advertisers in your market. For this reason, you won’t get any impressions on your advert and therefore no clicks. You need to make sure that your CPC isn’t so low that you won’t outbid any advertisers: your aim is to outbid a few so that you gain consistent traffic for long term success.
• Low CTR – From having a low CPC also means you won’t get the prime/best locations for your advert. For example, you will get  your advert displayed under a blog article rather than just before it at the top. From this, your CTR of your campaign will suffer. Low impressions with low CTR = low performance.