Definition
What is CPC (cost per click)?
CPC (cost per click) is the amount actually paid for a click on an ad. It is calculated by dividing a campaign's spend by the number of clicks obtained. CPC measures the price of a visit, not its value: a $2 click that never converts costs more than a $12 click that leads to a sale.
How the price of a click is set
On Google Ads, Microsoft Advertising and LinkedIn Ads, the price of a click comes out of a real-time auction. Three things weigh on it: competition on the query, the quality of your ad and the relevance of the page it leads to. On Google Ads, Quality Score (a rating from 1 to 10) can make cost per click vary by a factor of two at the same bid.
Actual CPC is often lower than your maximum bid: it is the amount paid, not the amount offered. Meta bills mostly on impressions: its CPC is an average calculated after the fact rather than an auction price.
What makes CPC vary
CPC changes with the platform, the industry and the format. A LinkedIn click costs several times a Meta click, because it buys a decision-maker Meta does not have. Law, insurance and renovation are among the most expensive auctions, because a customer there is worth a great deal. Search costs more per click than display and converts much better into sales. The CPC of the same keyword also varies from one market to another.
Why CPC does not decide a campaign
CPC is the most watched and the least decisive indicator. It can rise while profitability improves, if the clicks bought convert better. Conversely, a campaign that chases the cheapest click can produce volume without sales.
CPC is mostly a planning figure. A floor budget is worked out backwards: the number of conversions you want, then the expected conversion rate, then the cost per click.
CPC = spend ÷ number of clicks
CPC = CPM ÷ (1,000 × CTR), with CTR written as a decimal (2% = 0.02). At the same CPM, a better click-through rate lowers the cost per click.
A campaign spends $1,500 and gets 500 clicks: its average CPC is $3. If 2% of those visits become enquiries, it gets 10 enquiries at $150 each. Another campaign pays $6 per click but converts at 5%: its enquiry costs $120. Here, the more expensive click produces the cheaper enquiry.
We read CPC as an entry cost. It says what a visit costs. The conversion rate and the value of a customer then say whether that visit pays off. The figure that decides is the cost per acquisition, compared with the margin a customer is actually worth to your business.
CPC still has diagnostic value. When it rises while the search terms stay the same, the auction is paying more for the same clicks. When the terms broaden, the answer lies in exclusions.
Not to be confused with
- PPC
- PPC (pay-per-click) is the billing model where you pay per click. CPC is the metric that measures the price of that click.
- CPM
- CPM is the price of a thousand displays, whether anyone clicks or not. CPC is paid only when someone clicks.
- CPA
- CPC measures the price of a visit. CPA measures the price of an action obtained, once the conversion rate has done its work.
Related concepts
Further reading
- Google Ads: structure, exclude, measure
- The budget threshold below which a market test proves nothing
- LinkedIn: when the high cost is justified, and when it is not
- Google Ads keywords: the real lever is no longer the list, it is the exclusion
Related services
Frequently asked questions
How much does a click cost on Google Ads?
CPC ranges from a few cents to several tens of dollars depending on the industry and the competition on the query. No one knows yours before launch: the first weeks of a campaign are there precisely to establish it.
