What is My CPC? (Part I)

Have you taken that first step into pay-per-click advertising yet?  If you have, you've probably come across at least one screen where you were asked to input your Max CPC (see Figure 1).  But what is a CPC anyway and how do you pick the right one?

Figure 1.

CPC Defined

CPC stands for "cost per click".  It's the amount you pay when a lead clicks on your ad to visit your site.  This takes away a lot of the risk of spending your advertising budget on the Internet.  You only pay for the people who actually visit your web site.  Other types of online advertising may charge you a flat rate for displaying your ads regardless of whether customers ever visit your site.

What is the "Max" in "Max CPC" for?

The "Max" represents the most you are willing to pay for a lead to come to your site.  You won't always pay this amount and and you might pay less than your Max CPC.  How does this work?  LookSmart takes into consideration your Max CPC, how relevant you are, and what other people are bidding to determine how much to charge you.  We try to charge you the least amount possible while still getting you the best possible position.  If you're willing to pay a lot more than other advertisers, you won't be penalized for your over-enthusiasm.  You'll pay the going market rate instead.

Why would LookSmart charge you less than what you're willing to pay?  By making pricing flexible and responsive to your needs, we encourage more advertisers to participate in the system.  The more participation there is by advertisers, the more publishers are willing to create spaces on their web sites for you to place your ads.  It's an ecosystem where everyone benefits.

Next time, we'll look more closely at how to choose the right Max CPC for your advertisements.

Allen Hammock
Product Marketing Manager
allen.hammock@looksmart.net