Measuring Marketing

Chapter 66 Cost Per Click

Measurement Need

To understand the cost per click (CPC) of the marketing programs designed to generate word of mouth (WOM).

Solutioni

Two approaches to determine CPC will be discussed.

Approach 1: Cost Per Click

CPC is the price paid for an internet advertisement on a per click-through basis. Websites that offer online advertising have simple pricing structures. For example, consider a campaign where payment is based on the number of times a banner is clicked. Clicks are sold for $.10 per click. Hence, if there are a thousand clicks per week on the banner, the total amount payable to the website for that week would be $100.

Approach 2: Cost Per Clickwom

$\mathrm{Cos}tPer{\text{Click}}_{\text{woM}}=\frac{CPC}{WOM}$

Where

CPC = cost ...