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Cost per Converted clicks vs Cost divided by Converted Clicks

Google Employee
# 1
Google Employee
Hello Community, 

On calculating the cost per converted clicks as per the general formula i.e. cost divided by converted click most of the times we don't get the same amount that is reflected on the Adwords interface. This may end up creating a confusion. Hence I thought it would be great to explain the reason in the community forum. 
 
Why?

In simple words, not all clicks and their associated click cost are eligible for cost per converted clicks reporting. There are always some clicks that are not accounted for (meaning clicks which are included in Total/Served Cost but not in Actual Cost) and it turns out that in the cost/converted clicks even the cost for ineligible clicks is not taken into account (although they are included in the total cost column).
As a result, the numbers you see in the interface might be varied than the ones that you would get by dividing the cost column by the conversion column. Also, it is not just the clicks but also the associated cost that are not calculated.

Example

For example, such situation could happen in the case where the campaign(s) in question are targeting mobile devices. There are many low end mobile devices that do not accept cookies. Which means that the clicks and the associated click cost will not be included in the calculation and the cost/converted clicks metrics. This happens because in the devices that do not support cookies, the JavaScript that tracks your conversions (for example on the thank you page) does not load, hence these conversions can’t be tracked and are not included in the calculation of these metrics.

Numerical Example
 
Lets assume Campaign X reports as,
 
Total Cost = $100
Converted Clicks = 20
Cost/Converted Click (expected as per formula) = $5
 
However, Cost/Converted clicks = $4. 
 
Therefore as per the reported data, Actual Cost = $80  ie. $4 x 20. This is the amount you are billed for and has been accrued from eligible clicks.

Hope this helps Smiley Happy
1 Expert replyverified_user

Re: Cost per Converted clicks vs Cost divided by Converted Clicks

Explorer ✭ ☆ ☆
# 2
Explorer ✭ ☆ ☆
Thanks to posting this great article.
I have questions:
1) what is ineligible clicks ?
2) what called such type of click which have Total/Served Cost but not in Actual Cost?

Summary of question:
In end you have given an example, So according to your example clicks from low end mobile devices that do not accept cookies or java script that called as ineligible clicks ?

Regards
Mohit

Re: Cost per Converted clicks vs Cost divided by Converted Clicks

[ Edited ]
Google Employee
# 3
Google Employee

Hey Mohit,

Thanks for posting your question and helping everyone understand the concept better. Smiley Happy

Ineligible clicks are the clicks which are accounted for Total/Served Cost but not for Actual Cost. Let me give you a couple of examples which should help everyone understand this better.

- Invalid clicks:
a. Accidental clicks that provide no value, such as the second click of a double-click
b. Manual clicks intended to increase someone's advertising costs
c. Manual clicks intended to increase profits for website owners hosting your ads
d. Clicks and impressions by automated tools, robots, or other deceptive software

- Overdelivery cap is exceeded
Incases when the daily budget is exceeded even more than the 20% overdelivery cap, the cost is not accounted for in Actual cost.

- Others
Like the example of low end mobile devices given above, whenever the system is unable to track the click (through cookies and java script) be it on mobile, tablet or computer, it is considered as an ineligible click.

Again really appreciate you coming up with the question. Please reply if there are any further doubts Smiley Happy

Cost per Converted clicks vs Cost divided by Converted Clicks

Visitor ✭ ✭ ✭
# 4
Visitor ✭ ✭ ✭

Hi, thanks for the article. But I realised I am still being billed the total cost amount every month instead of the actual cost you stated. May I understand why?