Importance of Advertising CPC and CPM
Importance of advertising CPC and CPM
CPC and CPM are common indicators of Google and Facebook advertising. They represent the health status of the advertising, too high or too low will cause problems. ADCostly provides average CPC and CPM benchmarks for different industries and countries. With these benchmarks, you can better compare with your own advertising status and better perform advertising.
Regarding the importance of CPC and CPM, 7 marketing experts have brought us wonderful explanations, let's take a look.
Owner of Webconsuls
It's important to know the CPC, CPM, or CPA costs in countries or locations where you might run paid campaigns because these metrics are important when calculating the ROI of your campaigns. The ROI of your paid campaigns, whether that return is revenue, leads, awareness, etc, is the primary barometer of successful performance.
If I had the CPC and CPM of certain countries, I'd use that to determine how or if to advertise in that country. These metrics will go into a general formula that dictates how much budget to allocate to a certain area. If the value of a conversion is the same regardless of country, the areas with the higher CPCs will be targeted last - if at all. I'll want to maximize the volume I can do in the lowest CPC, CPM, or CPA countries before moving on to more expensive countries.
CEO of Robben Media
Knowing CPC and CPM gives you strong data to make strategic decisions, and ultimately increase return on ad spend. For example, if I know a country has a very small CPC and CPM, then I'm more likely to experiment on different ideas and use this as a training ground.
I may deploy ads that are very emotional while also driving super logical ads to see what's working. Then I'll pull the ads that do best, and deploy them to a country with a higher CPC and CPM. This is like how comedians test their jokes in smaller bars and clubs, and then pull their best ones for the big time show. Same concept, and it works wonderfully when advertising online.
CEO at SEO.co
The biggest advantage is that by knowing the cost per click for each country, you can set prices for your products depending on what is most economical. For example, let's say you were going to sell a digital product. You may look at what it costs in India in order to set the price at a competitive rate based on locale.
CEO and Founder of Inseev Interactive
Having access to CPC and CPM data prior to launching an ad campaign is extremely important as without this information it could be very difficult to calculate an expected ROI. If you don’t have a projected ROI going into an ad campaign, you have no way of knowing whether or not the cost of the campaign is worth the investment. Once you’ve obtained CPC and CPM data, you can use this information to determine which ad campaign will return the best results based on price point.
Marketing Manager at Hockerty and Sumissura
Knowing those 2 metrics will allow the advertiser defining what is the conversion rate needed for the traffic coming from that country. If you are landing in a new country where the advertising CPC is double than the one you have in your current markets, you will need also double the conversion, or double the average order. That might sound really discouraging but in my experience, that is not so difficult to happen. Using the same website, I advertise in countries with 3 times the average CPC of our initial markets, but the combination of higher conversion rate and higher average order compensates. And I usually see also the other way around, countries with really low CPC, where the conversion is also really low but it also compensates.
Most of ecommerces are on Google ads, the competition is huge and there might be companies that can burn some money for some time, but usually the market is well balanced and for that product that you are selling there is a right CPC and CPM to be paid. There are many things to do on the ads side, specially when it involves images and videos but the most important is optimizing the conversion of your website.
Content Lead at Geoff McDonald and Associates
Knowing the advertising CPC and CPM in different countries is important because it can give you insight into whether it will be beneficial for you to expand into those areas with your marketing efforts.
For example, if you’ve considered expanding to another country, but have found that the profit margin in that country is much lower than where you currently are, at first glance you may decide not to move there.
However, if you assess the CPC and/or CPM, you may find that in relation to your marketing efforts, it could still be worth your while to move into that location. Knowing multiple different countries’ advertising CPCs and CPMs will allow you to make more informed decisions as to what might be the next best location for you to expand into.
Marketing Manager of B2BDigitalMarketers
Recently we have been expanding our advertising into different countries and this is an exact question we have asked ourselves before we can determine our budget for each country respectively.
We have been expanding in Southeast Asia into Singapore, Indonesia, the Philippines, and Vietnam. We are already advertising in Malaysia and Cambodia and know the price that is required to meet our goals.
However why we need to know the CPC and CPM and why it is important for us because it gives us an idea of what is the demand for our products and services and if the keyword is profitable. This works quite well as a rule of thumb.
The next reason why these are important because it helps us determine the right budget to meet the goals. For example, USD5,000 for Malaysia is what we need, but then in Singapore, this almost triple to meet the same goals due to high CPC and CPM. So whether you are expanding or starting with advertising, knowing CPC and CPM is important because it will help you to determine how much you need to spend to achieve your goals.
E.g. If your goal is 100 leads a month and an average conversion rate is 2%, then you need to get 10, 000 clicks to achieve this and if CPC is 1$ then you need to spend around $10,000 to achieve this goal. Like this, you can give an estimate to the board of directors or higher management, how much your PPC campaign will cost. The same applies to display ads, knowing your target and CPM will help you to give an estimated price to achieve your goals.