There is increasing competition online to attract users to websites. Many online marketing strategies have emerged that help businesses to achieve their goal of generating more leads and increasing conversions. However, none is proving as effective as paid searches for increased traffic and conversions.
The search engine take
Cost per click (CPC) has two definitions. The definition you choose will depend on which viewpoint you take of the term. Search engines define the term as the cost charged to the advertiser for each time their ad is clicked on by a visitor.
Different search engines have different approaches to how they charge advertisers. They also provide different pricing models based on what the advertisers want to achieve. Search engines may charge for ads based on:
• The number of clicks on the ad
• The number of conversions from the ad
• The number of impressions
The actual cost will depend on the popularity of the keyword. If the keyword is popular, it is likely to cost more per click, conversion or impression. This is because there are many advertisers seeking to use the keyword in their ad and appear on relevant search results pages.
Search engines rely on an auction model to determine which ads will appear on search results pages. The auctions are run when the keyword is used in a query. Advertisers must place bids on the keyword. The higher your bid is, the higher your ad’s ranking will be.
However, the bid is not the only factor considered by the search engine. The search engine also considers the relevance of the ad to the user as well as the quality of the landing page. These factors are combined to provide a quality score. The higher your quality score, the higher your ranking. Ads with low bids but high quality scores can be ranked higher than those with high bids but low quality scores.
The advertiser’s view
An advertiser will define the cost per click as the cost they pay for each click by a visitor as well as the cost of the sponsored link. Advertisers set a budget that guides them on how much to pay for their ads. Most advertisers will set a maximum cost for the ad, which will also guide them in selecting their keywords.
The actual cost of your campaign will depend on the number of times your ads are clicked on and the popularity of the keyword.
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