Money & metrics · also called revenue per click
RPC (revenue per click)
RPC is the average revenue earned per monetised (paid ad) click: the "sell" price in search arbitrage. Convert it to revenue per visitor (RPV) before comparing it with CPC.
Revenue per click is revenue divided by clicks. The trap is in which clicks.
Feed reports usually quote RPC per monetised click: the publisher's share of what the advertiser paid, averaged over clicks on feed ads. Media buyers, by contrast, often say "RPC" for revenue divided by the clicks they bought, so that it can be compared directly with CPC. That second figure is more precisely called RPV or EPC. The two can differ by a factor of three or four, because most visitors never reach an ad click. Always ask which denominator is in use.
RPC per monetised click is set by the advertiser auction: the keyword, the visitor's country and device, the season, and the revenue share in the chain. It is also adjusted for quality. If an arbitrageur's clicks seldom convert for advertisers, smart pricing lowers what those clicks are worth. So RPC is partly a market price and partly a verdict on the traffic.
An example
Say 1,000 bought clicks at $0.20 cost $200. They produce 270 monetised clicks and $270 revenue. Feed RPC = $270 / 270 = $1.00. Revenue per bought click = $270 / 1,000 = $0.27. Compare the $0.27, not the $1.00, with the $0.20 CPC: the spread is 7 cents.
Related terms
CPC (cost per click)
CPC is the price paid for one click on an ad; in search arbitrage it is what the arbitrageur pays a traffic source for each visitor.
RPV (revenue per visit)
RPV is total revenue divided by the number of visits to the landing page, showing what one arriving visitor is worth on average.
EPC (earnings per click)
EPC is average earnings per click sent, a term borrowed from affiliate marketing that trackers use for revenue divided by clicks.
The spread (margin)
The spread is the gap between what an arbitrageur earns from a visitor and what that visitor cost to buy.
Monetised click (paid click)
A monetised click is a click on a sponsored listing from the search feed that an advertiser is charged for and the publisher is paid for.
Smart pricing
Smart pricing is Google's system for automatically lowering what an advertiser pays for a click on a partner site when that click is less likely to lead to a sale.
Sources: Google AdSense Help: About bidding on AdSense (smart pricing), ClickFlare: What is RSOC and how does it work