CPC
Cost per Click
Quick definition
Cost per click (CPC) is the average amount you pay for each click on an ad, calculated as advertising cost divided by clicks.
Formula
CPC = Advertising Cost ÷ Clicks
Formula variables
- Advertising Cost
- The spend attributed to the ads in the measurement period.
- Clicks
- The number of ad clicks counted over the same period, using the same definition of a click as the platform that reported the cost.
Worked example
- Advertising cost
- $1,200
- Clicks
- 800
1,200 ÷ 800
Result: $1.50
Each click cost an average of $1.50. The figures are illustrative.
How to interpret it
CPC tells you what traffic costs, not whether the traffic is worth it. A low CPC from visitors who never convert is more expensive in practice than a higher CPC from visitors who do.
Read CPC alongside the click-through rate and the conversion rate. Together they explain how cost per click turns into cost per conversion.
When it is useful
- Comparing the cost of traffic across keywords, audiences, creatives or channels.
- Budgeting: estimating how many clicks a spend level could buy at the current average price.
- Spotting auction or competition changes when CPC moves without a change in targeting.
Limitations
- It says nothing about what visitors do after the click.
- Platforms may report different click types (all clicks or link clicks only), so the same spend can give a different CPC.
- An average hides large differences between keywords, placements and devices.
Common mistakes
- Optimising for the lowest CPC rather than the lowest cost per conversion.
- Comparing CPC across channels that count clicks differently.
- Averaging CPC across campaigns without weighting by clicks.