What are CTR, CPC, CPA, and CPM

CTR | CPC | CPA | CPM. The 4c’s of Digital Marketing. If you guys have any confusion about it then do not worry. I am sure today all your doubts about CTR | CPC | CPA | CPM will going to an end because we are going to cover all the 4 c’s in this blog.

What is CTR (Click Through Rate)?

What is CPC (Cost Per Click)?

What is CPA (Cost Per Acquisition)?

What is CPM (Cont Per Impression)?

Let’s Discuss all in step by step.

CTR – Click Through Rate

Click through rate (CTR) basically works in two things:

  • One is impressions
  • Second is Clicks.

An impression is known as How often your ad or website is shown. So, for an example, I search on Google something the results are shown in a SERP is called impression and counted as one.

If second time I search for something again I saw the same ad. It will be the second impression of that ad.
Let take a screenshot example. I type in Google ==> “Google ads”

And below is my results:

Google ads - Impressions

On the topmost, I can see the ads result. This means one impression.

As many times I search I can see the ads. Also if I change the keywords from “Google ads” to “Google Adwords” I will see the ad again. Then this will be my second impression.

And below is the organic result. Which we can say optimized result.

Now comes to the second thing that is Clicks.

After the search, we click on some results which are known as clicks.

Now if we understand the meaning of the two Impressions and Clicks then it will be easy to understand the CTR (Click Through Rate).
The formula is Clicks ÷ Impressions = CTR

For example, I have clicked 5 times on Google ads results out of 100 impressions.
Then my CTR will be 5 ÷ 100 = 5% (5/100*100)

TIP: higher the CTR will make your Cost reduce.

CPC- Cost Per Click

As the name is shown click’s cost. Which means on getting 5 clicks how much I paid for a single click.
This topic leads me to include maximize Clicks in the Google Adwords campaign.

Check the bidding section. The “Maximum CPC bid limit (optional)” in the Bidding Section.

maximum CPC

The max CPC you enter here will be your maximum Cost per click. So I think now you understand the importance of max CPC. This CPC price is known as PPC (pay per Click).

CPA:

Cost Per Acquisition is based on the conversions. Which means if we get 5 clicks and only 1 get converted to out of the 5 clicks (this is for an example). It may be 2 or 3 or 4 or 5. I am here assuming 1 user is get converted. Then depending on the product or service that appeals to the user or customer.

To calculate this I am explaining a simple example:
In Rupees:
Assume – My total budget is Rupees 100 and I get 1 client converted in my Campaign.
1 ÷100 = 1% (1/100*100)
Then my CPA is 1%

In Dollars:
$100 total campaign budget
Conversions or products sale 1
CPA is equal to 1%

CPM:

Cost per impression means sometimes you pay on showing your Ads on Google Display Networks. You pay for 1000 impressions. For this, you can add the option again in your bidding strategy section.
See screenshot:

impression- CPM

This strategy works on Impression base.

Hope you understand all the C’s of PPC – Pay Per Click advertising marketing. If you have any questions you can comment below.