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How Cost Per Click (CPC) Is Affected By COVID-19

When it comes to advertising, the Cost Per Click (CPC) system is a favorite for small businesses. Under this model, rather than pay a premium for your business’s ad campaign, you pay a small fee for every person who decides to follow up on the ad. 

The CPC model has several advantages over a traditional flat-fee or timeslot system. By only paying for the ads that users actually click, a CPC system for ads is a lot less risky for businesses in the case that the ad doesn’t do well. Additionally, it’s generally much more affordable for small-scale businesses to budget for CPC ads than other options. 

Whether or not your business is currently using CPC, your business is probably facing some challenges right now due to the COVID-19 pandemic. Many businesses are pulling their ad spending to try and sustain themselves during a difficult time for the business.

How COVID-19 Trends Can Affect Your Business

If your business isn’t in immediate financial danger, you might not want to follow the trends when it comes to reducing your business’s ad spending. While reducing ad spending is a good way to save your budget, keeping your ad spending high during the pandemic carries its own advantages. With so many companies pulling out of the market, your business may have an opportunity to access many more customers than usual by sustaining its ad campaign.

One major reason to keep up your ad spending during the COVID-19 pandemic is specifically related to the CPC model. We’ve gathered the statistics, and over a 2-week period in March, the average cost-per-click for ads has gone down by around 5%. 

The CPC reduction is correlated with the 20% reduction in ad spending over the same 2-week period. It seems like more and more businesses will be forced to continue pulling their ad budget, so CPC is on track to continue its decline. The lower the cost per click for your ads, the more effective and efficient your ad campaign can be, making this a good way to save on your ad spending if your business can afford it. 

Should Your Business Take Advantage of the CPC Trend?

While now may seem like a good time to invest in discount-priced advertising, you should weigh the costs and benefits of doing so. This pandemic will drastically change the competitive landscape in your industry. Certain competitors may fail to survive through potential economic slowdown.

Depending on the kind of business you’re running, you may benefit more or less from additional ad spending at this time. If you’re selling on Amazon, you may be bottlenecked by Amazon’s COVID-19 product prioritizations. In that case, more advertising won’t help you and you’re probably better off reducing your ad spend in the short-term.

But not all businesses are affected by this. if your business is in good shape despite the economic and physical challenges that COVID-19 and quarantine measures have brought, now may be a good time to increase your ad spending. 

Just make sure you don’t overextend. Know your market, the landscape for your products, and your business can benefit from efficient advertising at a reduced cost.

RevenueWize: Optimized Ad Spend for Amazon Sellers

The current pandemic has drastically changed the competitive landscape on Amazon and most online marketplaces. But that doesn’t mean there isn’t ample opportunity available.

Remember, the goal of any Amazon seller is to get the most value out of your PPC ads. Companies selling in-demand products should look at expanding their marketing efforts to reach new customers.

RevenueWize simplifies that process for you by helping you identify profitable opportunities in your PPC ads on Amazon. Sign up for our platform today to see how you can improve core KPIs like your ACOS, ROAS, CPC, and more.