Search Engine Optimization

Cost-per-click (CPC) tends to increase during the holiday season. The holiday season can affect your ROI for an AdWords campaign, since those ads clicks are more likely to turn into sales.

Google Adwords advertisers could track their average cost-per-click (CPC) but what they should really see is Cost-per-acquisition (CPA).

• Cost-per-acquisition (CPA) is defined how much advertising budget you have to spend to make a sale.
• Conversion rate is defined as conversions (sales) per click.

Hal Varian, Google’s Chief Economist, tied altogether by following Formula:

Cost of clicks does tend to rise during the holidays. Clicks, cost, and conversions all go up during the holidays that cause conversions increase more than clicks. This makes the clicks more valuable, so advertisers raise their bids to reach more consumers.. As a result CPCs get pushed up. But, the CPA goes down.

Most likely, you get more sales around holiday time and increase your ROI through your effective AdWords campaign. As a result, those expensive clicks don’t seem quite expensive any longer because you get higher conversion rate.