If you’re new to online advertising, terms like CPC and PPC might need to be clarified. However, understanding them is key to running successful ad campaigns. CPC stands for Cost Per Click, and PPC stands for Pay Per Click. Though they sound similar, what is the main difference between CPC VS CPC?

The main difference between CPC and PPC is that CPC (Cost Per Click) specifically refers to paying for each click on your ad, while PPC (Pay Per Click) is a broader term that includes CPC but also covers other payment methods like paying for ad impressions or video views.

In this blog post, we will explain CPC and PPC, their key differences, and how they relate to each other.

What Is PPC?

Pay-per-click (PPC) marketing has become one of the most used techniques for increasing traffic to your website and enhancing revenue. In this type of ad, the advertisement is shown on third-party websites, social media, and search engines. You pay every time your ad is clicked.

Google is the undisputed leader in PPC marketing: It derives more than 135 billion dollars a year (yes, a year!) in ad revenues—and it’s actually increasing every year. Because it is widespread and effective, beginners often start with Google Ads.

PPC is an advertising method that not only helps increase the number of visitors to your site but also enhances your sales. Since it is easy to use, this method allows you to be in control of the expenses you allocate for your advertising.

What Is CPC?

The acronym CPC stands for cost per click. If you sell items online and rely on pay-per-click (PPC) advertising to generate potential customers, understanding your cost per click is critical so you can control your spending and your return on investment (ROI). CPC is calculated by dividing your total expenditure for the purchase of the ad by the number of clicks you make. 

Example: CPC = total, upon which your ad was purchased, divided by the total number of clicks on your ad. 

Let’s say you spent $100 on a PPC ad. You could get 100 clicks as a result of your ad. In this case, your CPC is $1. Lower is always better. Therefore, the lower your CPC, the better your ad campaign is performing because you’re getting a click for less money.

How Does PPC work?

Pay-per-click (PPC) marketing refers to ads that a business pays for each time someone clicks on them. These include the ads at the top and sidebar of search engines (like Google and Bing) and social media sites.

Here’s how it works:

Keyword Bidding: A keyword is a word that corresponds to a product or service offered by an advertiser. So, a shoe store may bid on the keyword ‘buy shoes online.’

Ad Auction: When a keyword is searched, an auction places ads based on the bid amount and the crack of how well the ad has performed so far (its quality).

Pay Per Click: The advertiser is charged only when someone clicks on their ad. The cost per click (CPC) can vary dramatically depending on how much it’s worth to the advertiser and how many people or sites are competing for the same space.

Targeting: the advertiser can select the audience (by location, age, interests, etc). PPC platforms satisfy the two decisive factors that distinguish web surfing from more classic information gathering: targeting and immediacy. Traditional information sources are targeted in different ways, and searching for information on Google is quicker than calling directory inquiries or checking the local Yellow Pages. 

Ad Copy + Landing Page: When you create an ad, the text has to be really strong and have a great call-to-action. The person will go to a landing page, and how relevant and engaging the landing page is will determine how effective the ad is.

Tracking and Optimisation: Viewed by the advertiser, tracking is summarised by reporting. It covers things such as the number of clicks that an ad receives, the amount of money spent, and the number of sales or leads generated. This information influences the algorithms to either raise or lower the bids, and the process then selects the number and quality of ads to serve.

How Do PPC & CPC Relate to One Another?

Pay-per-click (PPC) marketing is the most commonly used way to advertise on the web. These are the ads that you see on search engine result pages and in the spaces between websites. PPC is short for pay-per-click because, in this system, advertisers pay each time anyone on the web clicks on their advertisement. A cost per click (or CPC) is a crucial benchmark in PPC advertising since the Cost Per Click tells the advertiser how much each click is worth.

 Advertisers can bid only up to a predetermined ‘max’ level. That is, the maximum amount of money they might be willing to spend each time the ad is clicked. Consistent with other online auctions, higher bids get higher placements, but the ad’s quality score also determines where it appears on the page. This quality score is based on how relevant the ad itself and its accompanying keywords are to what the search engine knows about the user experience.

 Each time somebody clicks on your ad, you will be charged the CPC. However, the actual CPC can very well be less than the maximum bid – the cost-per-click depends on the bids of your fellow advertisers competing beside you, as well as on how well your ad scores in the quality score metric.

 To put it all together, here is what we know:

a) Setting a bid and paying for clicks are the two most important parts of a PPC ad campaign. Most importantly, CPC stands for how much a click is worth.

b) The bid and the quality score your ad receives determine where your ad will appear.

c) Every time someone clicks on your ad, it will cost you money.

d) However, if your ad manages to bring valuable traffic to your website, it may be money well spent.

Key Difference Between CPC VS PPC

Here are seven major differences:

Definition: CPC is the actual cost you pay every time a user clicks on your ad, whereas PPC is the more general term that refers to multiple ad models, including those that require payment after someone clicks on your ad. 

Scope: CPC is focused on advertising cost-effectiveness just for the clicks delivered from your advertising campaign, whereas PPC is used to cover a wider advertising space than paying just for clicks (such as with PPC this means you could also be charged for every impression or conversion you get from your campaign).

Flexibility: You have more control over what you pay for adverts because you select a maximum bid or budget, whereas, with PPC, you’ll pay differently in different models (cost per mille, Cost Per Acquisition, and more).

Performance Measurement: CPC (cost per click) gives you a simple measure of your ad’s success. With PPC, there’s quite a bit more math, as there are a variety of payment structures calling for metrics like CPM (cost per thousand impressions) or CPA (cost per action).

Ad Placement: In CPC advertising, you typically bid for ad placement on a keyword/audience basis and pay only when the ad is clicked upon. In PPC advertising, you have more placement options at your disposal, ranging from search engines to social media and even display networks.

Budgeting: With CPC, you can budget more specifically because you’re paying for clicks. Meanwhile, PPC demands a more robust budgeting strategy because you have to account for different systems of ‘paying what you’re told’ as well as vagaries in different performance metrics.

Risk Management: Although the risks with CPC are tied largely to the cost of a click, with PPC, you may have additional risks depending on your payment model – for example, payments per 1,000 impressions (CPM) per click, regardless of a conversion (PPC) or per conversion (CPA).

CPC VS PPC: Benefits

CPC (Cost Per Click) and PPC (Pay Per Click) are two popular online advertising models. Both have benefits, but they work a bit differently.

CPC is when you pay each time someone clicks on your ad. It’s straightforward—you only pay when people are interested enough to click.

PPC is a broader term. It includes CPC but can also involve paying for other actions, like ad impressions or video views.

The benefits of CPC are clarity and control. You know exactly what you’re paying for—clicks. And you can set a budget so you don’t overspend.

PPC, on the other hand, offers more flexibility. Depending on your goals, you can choose different payment methods. For example, if you want to raise awareness, you pay for impressions rather than clicks.

Overall, CPC is great for direct response advertising, where you want people to click and take action. PPC gives you more options to tailor your strategy to your specific goals. Both can be effective—it just depends on what you’re trying to achieve.

FAQs

Which one is better for my business, CPC or PPC?

It depends on your goals. If you want direct responses like clicks or conversions, CPC might be best. If you’re aiming for broader goals like brand awareness, PPC offers more flexibility in payment methods.

How do I control costs with CPC and PPC?

With both CPC and PPC, you can set budgets to control spending. You can decide how much you’re willing to pay per click or action, and you won’t exceed that amount.

Do I have to pay for ad views with CPC and PPC?

No, with CPC and most PPC models, you only pay when someone interacts with your ad. If you choose a payment method based on impressions rather than clicks, you will only pay for ad views.

Can I track the effectiveness of my ads with CPC and PPC?

Yes, both CPC and PPC platforms offer analytics tools to track ad performance. You can see metrics like clicks, conversions, and impressions to measure the success of your ads and make adjustments as needed.

How quickly can I see results with CPC and PPC?

Results can vary depending on factors like your budget, targeting, and competition. Generally, both CPC and PPC campaigns can start delivering results soon after they’re launched, but it might take some time to optimize and see the full impact.

Are CPC and PPC suitable for small businesses?

Yes, both CPC and PPC can be beneficial for small businesses. They offer flexibility in budgeting and targeting, allowing small businesses to compete with larger ones on a level playing field in digital advertising.

Final Words

Understanding the differences and relationships between CPC and PPC is crucial for beginners in online advertising. CPC focuses on paying for clicks, while PPC is a broader term that includes various payment methods like clicks, impressions, or views. Both methods have their benefits, depending on your advertising goals. CPC is great for direct responses, while PPC offers more flexibility. By knowing these basics, you can make better choices for your ad campaigns. Keep experimenting and tracking your results to find what works best for your business.