Higher CTR, Lower CPC. Why? (6)
Greetings.
Quick question. Why does an advertisers CPC go down when their CTR goes up? My only guess is that when you have a higher CTR it shows the network (FB, Google, PoF, etc) that you are more relevant thus making the user experience better. Is that it?
Also, if they lower your CPC because your CTR is high, doesn't that mean your ad is displayed less frequently than the people who are bidding higher than you?
Sorry if these are stupid questions! 
make yourself familiar with eCPM and you'll understand.
What traffic source are you referring to? If your talking about facebook and google, your CPC goes down because overall they are still making more money from you, but you are getting a discount because of good performance. At least thats what i think :/ haha
IMO don't focus on it too much dude. A lot of these minor technicalities will make you focus on the wrong things. Don't fall in that trap.
Hope that helps
If you are paying CPC , the site you are advertising on makes more money when your ad is clicked on more often (higher ctr). So it makes sense for them to want to show your ad that would get 10 clicks in 1000 impressions than some other ad that would get 5 clicks in 1000 impressions.
Originally Posted by aplchian
When you search for any term in Google, I thought that the results showed those willing to pay the most. So if they lower your CPC are they lowering your bid? If that is the case doesn't that mean the others who are bidding more than you will be displayed more?
Originally Posted by orlandoprofit
There's a whole formula that takes into account:
User experience with the site
Click price
CTR
Basically in a nut shell you can rank number 1 if you bid lower but your CTR is good and have a high quality score.
For QS they look at things like bounce rate, site relevance and some other things you can read about elsewhere.
Think of it as an affiliate. It's not just about payout and just about conversion it takes both of those to get a metric of EPC. You can have a deal that pays a million dollars and never converts and you make no money. You can have a deal that converts like wild fire and pays 2 cents and you make no money ( unless you're running in africa
)Same is true for cpc platforms it's all base on eCPM as someone mentioned which is really how much money they make based on showing the user 1k impressions.
So lets take a couple examples.
Someone bids 2$ per click and gets a .1 ctr that means for every 1,000 impressions that google shows that ad they're making 2$ because at a .1 ctr would give you 1 click per 1k impressions.
Someone else bids 75 cents and gets a .4 ctr that means for every 1,000 impressions that google shows that ad google is making $3 because a .4 ctr would give you 1 click per 1k impressions.
So net net Google makes more money at the lower bid.
Hope that helps.
P.S. I have a couple of posts that are useful for making conversions as a media buyer to figure out things like this.
http://www.oooff.com/php-affiliate-s...t-rois-part-1/
http://www.oooff.com/php-affiliate-s...ng-cpc-part-2/
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