CPC - Advantages and Drawbacks

What does CPC indicate?

When we think of high paying keywords, the first thing that pops up in our mind is CPC. CPC (Cost Per Click) is the maximum amount of money an advertiser is willing to pay for a click. Higher the CPC of a particular keyword, more will be the payouts you can expect by targeting that keyword in your AdSense websites. You can get the most accurate CPC from the source itself - Google.

However, CPC is not the only factor that tells the profitability of a keyword. There are many other factors that you should consider.

Drawbacks of CPC

- What if there are no advertisers bidding on a keyword having high CPC? Obviously, it means no one is going to pay you that high for a click.
- What if the traffic on the keyword is technical enough and does not click on ads (banner blindness)?
- What if Google gets loads of traffic on that keyword, enough to fulfill the desires of high paying advertisers? In this case, Google will only throw remaining peanuts towards you.

Obviously, Google will like to keep all the high paying ads within its own pages. So you see, CPC just shows you a small part of the entire picture. We shall explore the rest part of the picture…

Number of Sponsors - The Most Important Figure

Keywords with high CPC do not always come with high number of advertisers. There are many keywords in Google’s Adwords system that have a high price, but almost no or very less number of advertisers. Now, if you build a web page or website around a keyword on which no one is bidding, Google will try to fill the ad blocks with ads of the related keywords rather than the high paying keyword you were initially targeting. There is no guarantee that ads of the related keywords will be good converters. Therefore, there is every likelihood that your clicks will be passed through SmartPricing Filter, eventually resulting in lesser payouts.

Hence, it is important to see the number of sponsors bidding on the keyword in question. If there are more the advertisers, there will be more competition among them to get the top position. This means that there will be more revenue per click that they are willing to share with you. In other words, more sponsors mean more people fighting against one another other to pay you more Adsense money. Read more…

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Topics Covered in this Guide:

- What Google AdSense Engineers say about CTR
- What Webmasters have concluded about CTR
- Traffic and its effects on CTR
- Experiments with CTR

What Google AdSense Engineers Say

- An email conversation with a Google Engineer:

“Due to the dynamic nature of Google AdSense, fluctuations in your revenue will occur. Your earnings will depend on a number of factors, including the types of ads being served to your pages, the cost per click or cost per impression of these ads, and your users’ click through selections. Regarding ad placement - the best ad format varies from page to page. We’ve observed that, in general, wider ads perform better because of their reader-friendly format. We strongly recommend putting your users first when deciding on ad placement. Think about their behavior on different pages, and what will be most useful and visible to them. You’ll find that the most optimal ad position isn’t always what you expect on certain pages.” Read more…