PPC vs CPC: Key Differences, How They Work & Their Value

When comparing PPC vs CPC, some people can get lost and say both are the same. That is a common mistake due to their similarities. To help you avoid that misconception, here you got an explanation more in detail. Let us see what they are and how they work.

PPC vs CPC: Key Concepts

As the title says PPC vs CPC stands for Pay-Per-Click vs Cost-Per-Click. This info alone is not an explanation of what they are. They are both essential parts of the same advertising tool, you can say that one comes from the other. 

In a broader sense, PPC and CPC are two sides of the same coin. However, it is a good time to remind you they are not the same. While PPC is a type of ad, CPC is more a performance indicator than anything else. It is time now to talk about both in-depth.

What is PPC?

It is a helpful method to advertise online. This method charges an amount of money to the company in order to advertise a link to its website. So when you click on the advertising the company adds the accorded amount to the company’s bill. 

That is why it is Pay-Per-Click. You only pay when the ad gets a click linked to your desired page. Of course, there are some things to be aware of PPC like the keyword selection and the keyword bidding. Let us get deeper into it next and see how actually PPC works.

How Does PPC Work?

This method works differently depending on the platform your advertising will appear. For instance, let us analyze what happens to PPC on Google. As it is a giant synonymous with advertising, PPC is related to paid search.

And this is the reason why businesses look for Google to show their brands and marketing stuff.

Google sets ads in two formats: Search Ads and Product Listing Ads (PLA). In the first one, google evaluates if showing results based on comparing B2B or B2C companies.

B2B means business to business while B2C stands for business to customers. So Search Ads compares business types.

PLA shows results based on e-commerces and B2C types of business since is directed to products. However, this is just the way Google deals with PPC.

What about Facebook or Amazon PPC ads?

The process is like Google’s refining method for success: select strong keywords and make smart bidding. The major difference in the type of ads they show is the parameters they evaluate.

Facebook tends to show ads based on behavior, interests, the community, and custom audiences.

Amazon picks only people based on behavior and the traceable cookies and of course the Amazon SERP. This giant company also has 4 ways to show ads. Amazon shows sponsored product ads, headline search ads, product display ads, and sponsored brand ads.

What is CPC?

This is not a method but a performance indicator of how much are you spending on a PPC campaign. It shows the relation between the money spent on a PPC ad and the counted clicks the ad gets. This indicator is essential to know if your ads are getting the expected success.

However, CPC is an important trait of PPC advertising. It is a formula condensing in a simple way a parameter of success. The formula is CPC=TMS/TMC where TMS is the total money spent and TMC is the measured clicks.

So if you more clicks the CPC will remain low, which means it is a successful ad campaign.

How Does CPC Work?

As mentioned before, CPC uses a simple formula to calculate a value. Let us use a practical example of the calculation of CPC. 

Assume the amount paid for the PPC campaign is 800 dollars and the clicks obtained were 400 clicks. If you take both values and divide 800 by 400 you find out the CPC is 2. This means that each click did cost 2 dollars. 

Nevertheless, CPC has four levels you can consider besides the PPC level. They are the account CPC level, the campaign level, ad group level, and keyword CPC level. So they all exist to let you know how profitable is PPC advertising in a broader perspective.

It’s comprehensible that you want to lower the CPC by perfecting the PPC features, but it’s not the only way. You must take a look at the CTR (Click-through rate) expected to avoid bidding less for the keyword.

Google is very picky with these metrics, so it’s better to have them in mind.

Another aspect important to Google is the relevance of the ad to user intent to find it. If your ad matches what the user must be looking for then it will be more likely to appear. Google tends to give a score to websites and keywords from 1 to 10, so the higher the better.

One last aspect to have in consideration is the landing page experience. Google has a special predilection for websites with low bouncing rates and high traffic. These pages score higher on Google’s qualification, hence they are more visible.

CPC as a Report Metric

You can set the budget for a PPC campaign but you cannot know how much a click will cost. Factors like keyword competition, changeable user behavior, and other variables make it impossible to foresee a future cost.

Therefore, you must be aware of CPC on reports to help you lower the cost per click. 

Have in mind that it will result better to run ads for Christmas trees in July than in December. The bidding lows and the keyword competition lows out of season. So when running a campaign have in mind all these factors to understand better the report on your CPC.

Key Differences Between Pay-Per-Click And Cost-Per-Click

There are a lot of differences you can point to when comparing PPC vs CPC. But the ones you must focus on are the next ones:

1. What They Are

To start, as said before, PPC is a method, which means it has steps to perform well. While CPC is a performance indicator by itself. Basically what they have in common in this aspect is the words “per click” on the abbreviation. Beyond that, they have nothing in common.

2. What They Do

Pay Per Click focuses on setting the parameters for a well-spotted ad like the keyword bidding and ad placement.

On a PPC campaign, you set the price for the click, where the ad appears, and the keywords to use. Additionally, you can ban some words, some target, and even when to show the advertisement.

On the other hand, CPC shows how profitable is each click, taking data from the bulk of information. Remember that most digital marketing features are traceable, so each public’s moves are counted and followed properly. Then, you can say the lower CPC the better.

3. What They Point

On PPC you can say how much money you spend on the campaign and how much to pay for clicks. Pay-per-click advertising will always try to aim for the best relation between exposure and budget.

CPC points something different. When you see the row of cost per click on your service’s interface, you only see a number.

This number guides you if you are successful or not. If your PPC needs to refine the method or not. So they both point out different feats of the ad campaign.

4. The Platform They Appear On

When you set PPC advertising on Google, it appears on the SERP of google. When you decide to show it on Facebook, it appears on parts of Facebook’s interface. The same when you want to display it on Instagram, so your PPC will appear sometimes on the screen. 

Meanwhile, CPC will not appear for the people you are trying to reach, it appears only for the marketeer.

It appears alongside all the metrics the advertising campaign will show. CPC will appear on Google Adwords, Google Analytics, and the analytics tools Facebook and Instagram have. 

Understanding The Value of Online Advertising

Now that you understand the differences between Pay-Per-Click and Cost-Per-Click. It is time for you to know the value of online advertising for your business. 

There are several benefits when you advertise on the internet. Firstly, you’re getting global reach for whatever you sell, and you can offer to people away whatever you have.

So your brand will be recognized all around the world just by helping people to fulfill a need. Your brand will become an icon of the problem-solving business.

Now, whenever people use the phrase “You must crack an egg to make an omelet”, this isn’t the case. The risk in business minimizes when you do proper research before “taking the risk”. So if it is worth or not the effort the answer is YES, but only if you know what you’re doing.

However, have in mind that over the last couple of decades presidential campaigns have used online advertising for propaganda. And we use this example because it shows how digital marketing and online advertising is getting more relevant. 

There are many tools you can use to give notoriety to your business or your brand. Some of them are free, and some must be previously studied to make the most while saving money.

Internet tools will make your company reach its full potential, especially ads because of the traits of internet ads.

These traits are: 

1. Global reach.
2. High cost-benefit.
3. Reaching of the interested ones.
4. High level of engagement.
5. Traceable data.
6. Analytics and insights.
7. Fast and easy to get running.

So advertising online is not what it used to be back in the ’90s. It evolved, mutated into a living organism with the mere purpose of helping your business whatever it is. 

Is Online Advertising Expensive?

Generally no. It is inexpensive. But instead of speaking of ciphers to spend, let’s talk about ciphers to earn. In terms of billions of dollars, the giant Google in 2019 gave a total revenue of 134,81 billion dollars.

This revenue was followed by another giant like Facebook but only reached 69,66 billion dollars.

The most effective way to get the higher revenue and the smartest investment is by investing in PPI and PPC. PPI means pay per impression and PPC, well, we already covered that before. Therefore if you are planning to invest in your business, do it smartly, invest in online ads.

Regardless of whether your company is doing good on numbers, it can always do it better with the proper advertising.

Think for a second: if the advertising method has been proved through decades, why not try it? This can be the difference in the future from paying to rent an office and having your own building.

Why Brimar Online Marketing is The Best Option For You?

We have years of experience in the business that lets us know what kind of solution to propose.

Whenever you come with a challenge, with a new goal that you want to reach, we help your company. No matter how difficult your goal looks, we’re not the ones to criticize, but the ones to serve.

Brimar’s quality we seek is not met when our clients say “Ok… Good job”, but when they become fans.

When a new customer is happy with the results we brought him, then we can say our goal is met. If not, how do we make this world a better place? How are we going to get recommendations from unhappy customers?

Our digital agency offers you all the knowledge, experience, team, and technology to make your brand great. We always treat every new client’s company like our own, so you’ll get an excellent service. 

Let us manage your digital marketing ideas, issues, and we will give solutions to your problems. Everything from email marketing, web design, to PPC advertising, and social media management, there’s a pleasure to help you.

You can focus on other parts of your business while we make it more relevant to the internet.

Trust us and let Brimar be your digital marketing solutions.