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February 23, 2016

An In-effective mantra: “Cost per Click”

CPC

Very often I am confronted with the objection that RTBs have a higher cost per click (CPC) than PPC systems. Yes, this is true – not always, but often. But is a higher cost per click really what you want? Well, usually not. In fact, we really want relevant / high-quality clicks – users who are truly interested in our content – users who fill orders or search more pages on our site.

Just as when you want to win an F1 race, the only criterion you will be interested in will be the maximum speed of the car. But that result will depend on the experience of the driver, the quality of the service team, the tires, etc.

Mixing Apples (display) with Oranges (search)

There is a huge difference between PPC ads in search results and banner ads in content. In-search ads go to users who have searched for something: these users want to visit a relevant site. Content ads are shown to users who are doing something else entirely.

In these two cases, effectiveness must be measured differently – CPC will be different. It is not possible to compare the two types of ads. You should use display ads after you’ve already used search ads to maximize your ads’ effectiveness.

Measuring Quality of Click

However, the click is not the final parameter. We don’t want just any click – we want users who are actually interested in our content.

Always measure the quality of clicks. The simplest measure is in an eshop campaign. Usually we want to sell – in this case, a conversion is a filled order. What is important is not CPC (click cost); far more important is CPA (cost per action). And a higher CPC often means a lower CPA.

On content sites (with no simple conversion), we can measure how many pages users visit, how long they stay on the website, what the bounce-rate is, etc.

Evaluations can be presented as examples for eshops:

retargeting

Or for content sites:

content_evaluateEN

It’s been shown that cost per click is important, but it’s not the only (nor the most important) parameter. Some sources with higher cost per click may result in inferior conversion.

For content sites, we can set up a formula to evaluate conversion based on higher quality parameters.

Programmatic
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