How to Calculate CPC of Ads Displayed on Your Blog (Cost Per Click)

CPC is the abbreviation of Cost Per Click and plays an important role in determine the net income from online ads programs like Google Adsense, Infolinks, Adbrite etc. One way to increase the income from PPC programs is to increase the CPC of the ads displaying on your website. So the question is whether we can calculate the Cost Per Click rate of advertisements shown on our blogs ?. If there is only one click, the amount you have received by that click is the Cost Per Click. It is the exact amount you will receive once a reader clicks on the advertisement shown on your webpage. However, it will be difficult to find this value if your AdSense unit received multiple clicks. If there are multiple clicks, you can follow the steps below to calculate average CPC of an ad unit.


Steps to Calculate Average CPC of Ads Shown on Your Blog

To calculate this value, we can use two different methods. Each methods are explained below with examples.
  1. Calculate CPC from CPM and CTR:

    Formula to calculate Cost Per Click from CPM (Cost Per 1000 impressions) and CTR (Click Through Rate) is given below.

    CPC = CPM / (1000 × CTR)

    Let us consider a AdSense unit with CPM rate $10 with 2% CTR. According to the above formula, the Cost Per Click will be 10/(1000 * 2%) = 0.5

    If you do not know the terms in the equation provided, you are welcome to read our tutorials explaining those terms. To learn more about CTR, follow the link below.
    Steps to Calculate CTR

  2. Calculate CPC from Total Earning and CTR:

    Average Conversion rate of a click = Total income / Total number of clicks

    To explain it, let us take an example. If your website received 5000 impressions on a day with 40 clicks and the net income is $15. So to calculate average CPC of the day follow the steps given below.

    Average CPC of the day= Total income / Number of clicks

    = 15/40

    = 0.375

    As it is calculated in dollar we need to put $ in front of the output. Here the Average CPC of the day is $0.375.

How to Increase CPC of Ads Shown on My Blog?

It depends on the bid rate set by advertisers as the compensation for a valid click on their advertisement displayed on your website. So it is our duty to maintain the quality of the content in our website for higher rate. We can increase the CPC of Ad units shown on our blogs if we care following factors.

  1. Make sure your webpage is optimized with high paying keywords.

  2. Too many Ad units on your webpage reduces the net Cost Per Click

  3. Ads on Top and near content have higher CPC. Following link tells how to do it in a blogger blog.
    How to Insert AdSense Ads between Blog Title and Content

  4. Make sure Ads on your webpage have no visibility issues

  5. Getting more traffic helps to earn more with already defined CPC

If you learned how to Calculate Cost Per Click of ads showing on your blog, I recommend you to follow the link below to learn more practical uses of this term.
How Much Traffic My Blog Should Get to Earn $100 Per Day

Technology Blog

2 comments:

Tammy said...

Hey, this is Tammy from Infolinks. Great article! I also see that you are using our In-Text ads on your site! If you or your readers have any questions for us just send us an email to support@infolinks.com.

Take care,

Tammy
http://www.infolinks.com
www.facebook.com/infolinks

Siju George said...

Hi Tammy,

Thanks for your comment and contact details.