You seem to have a condition that I like to call the “CPC Myopia Disease”

This condition afflicts many new advertisers and causes their critical reasoning skills to falter. It seems to stem from the misconception that all clicks have the exact same value. Or, as in your case, that a click is either from “genuine traffic”, or not, and that being the only differentiator.

In reality, each segment within a genuine traffic source will have a unique value per click. Not every segment has the same value per click. Some segments will have a value per click that is greater then the cost per click and others will not. The amount of the click is irrelevant, only the ratio of value to cost, and the total number of clicks available.

Here’s my prescription for a cure of the “CPC Myopia Disease”, study the following information until you understand it well enough to overcome the condition that causes this terrible disease.

Your total profit is determined by the following formula:

(Value Per Click – Cost Per Click) * Available Clicks = Total Profit

It doesn’t matter how cheap the CPC is, However it does matter how valuable the click is in relation to that cost.

So what does that mean in real-world practice?

It means that a $10 CPC is more profitable than a $0.02 CPC if the Value: cost ratio is higher. So stop looking at just CPC and start looking at Value: Cost ratios.

Also, please note that higher Value: Cost ratios do not always equal greater profits. You must also include the number of available clicks to find the total profit.

For example:

$3.00 Value Per Click with a CPC of $1.00 = 3:1 Value-to-cost ratio

Which is higher than

$2.00 Value Per Click with a CPC of $1.00 = 2:1 value-to-cost ratio

The 3:1 ratio is higher than the 2:1 ratio, and obviously more profitable on a per-click basis, even though the CPC is identical. However, this does not take into account the full formula for total profits, as presented above. You still need to multiple the ratio times the available clicks to find the most profitable of the two.

Please consider the following scenario:

($2 VPC – $1 CPC) * 1400 Clicks = $1400 Profit

($3 VPC – $1 CPC) * 600 Clicks = $1,200 Profit

($0.03 VPC – $0.01 CPC) * 16,000 Clicks = $320 profit

In the above scenario, neither the highest number of clicks, nor the lowest CPC, nor even the highest value to click ratio nets the highest total profit. You must apply the entire profit formula to find the greatest net value. Which, in this case, is not the segment with the lowest CPC, nor the segment with the greatest number of clicks, not the highest value to cost ratio, no, not even the segment with the highest profit per click.

So what can we learn from this?

Whenever you focus myopically on a single metric, like CPC, or ROI, anything other than total profit, you are likely to miss opportunities to maximize your total profit.

So please do yourself a favor, apply the entire profit formula, not just one metric that is meaningless without consideration of the rest of the profit formula. If we all do our part then maybe we can see this terrible disease “CPC Myopia” finally overcome.