A lot of retargeting platforms push advertisers into buying ads on a cost-per-click (CPC) or cost-per-action (CPA) basis. Many advertisers are just fine with this arrangement, as it comes with a long list of advantages, but to make fully-informed decisions about how you allocate your ad budget, it’s important to understand what’s going on behind the scenes.
Isn’t CPC basically a “risk-free” way of buying ads?
CPC buying seems like a logical way to buy ads: in order to generate sales, you need clicks, and you’re happy to pay up to $X per click in pursuit of your sales targets. If you don’t get clicks, you don’t pay a dime. Sales revenue rises and falls in lockstep with advertising spend. It’s the holy grail of advertising!