Difference Between CPC and Goal/Value Per Click

CPC (Cost per Click), a metrics which revolves around driving visitor to the website and in return accruing costs. For every click there is a cost associated (if  the model revolves around Pay Per Click). Overtime if CPC starts increasing for a keyword  it could be due to poor quality score or there is tense competition in the market. Mostly during peak season the CPC tends to increase as every advertiser would become aggressive.

CPC = Cost / Click

Value Per Click is a metrics which revolves around the ratio between goal or conversion and clicks. This metrics will allow us to measure the quality of the clicks. In theory if the number of clicks increase over the site the conversion should also increase. More clicks should result towards more conversion. If the clicks are increasing and conversion remains stable then the quality of click being bought is not good.

Conversion Rate = Value or Conversion / Click

Increasing CPC would lead towards more clicks and these extra clicks should result into conversion. Quality of clicks should always be placed into radar and this could be done by measuring conversion rate. It is obvious that conversion rate goes down initially as new clicks bought are to be optimized. Once proper optimization over the keywords is done the conversion rate or value per click would become stable. A 2.00% conversion rate is always good.

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