What is CPC (cost per click)?
Quick answer
CPC, or cost per click, is the average amount an advertiser pays each time someone clicks one of its ads. It is calculated as total ad spend divided by total clicks: $900 spent for 450 clicks is a CPC of $2.00.
Last updated
Updated · By Robert Breen
Why it matters
CPC is the price of attention. Together with conversion rate it decides what each customer costs, so a small change matters: if CPC rises from $2 to $3 and nothing else changes, every sale from that campaign costs 50% more.
CPC also tells you how competitive a keyword or audience is. Searches with buying intent, like "accounting software for nonprofits", cost more than broad research searches because more businesses bid for them.
A worked example
A recruitment agency runs two Google Ads campaigns. "Hire a bookkeeper" spends $1,800 for 400 clicks, a CPC of $4.50. "Bookkeeper salary guide" spends $600 for 500 clicks, a CPC of $1.20. At first glance the second campaign looks four times as efficient.
But the first campaign brought 20 employer inquiries (5% of clicks) and the second brought 2 (0.4%). Cost per inquiry is $1,800 / 20 = $90 against $600 / 2 = $300. The expensive clicks were the cheap customers, which is why CPC is never judged on its own.
Often confused with
CPC vs PPC
PPC is the pay-per-click model. CPC is the price paid per click inside it.
Average CPC vs max CPC
Max CPC is the most you tell Google you will pay for a click. Average CPC is what you actually paid, which is usually lower because the ad auction charges just enough to beat the next advertiser.
CPC vs CPA
CPC is the cost of a visit. CPA is the cost of a result such as a sale or lead. CPA = CPC / conversion rate.
Tips
- Compare CPC only within the same channel and similar keywords.
- Raise ad relevance (Google’s Quality Score) to pay less for the same position.
- Watch CPA alongside CPC: a cheaper click is only better if it still converts.
Related terms
Learn it in a free lesson
- PPC Metrics Explained: CPC, CTR, CPA and ROAS With Examples (about 11 minutes)
Questions about it
- What is a good click-through rate?: A good CTR depends on the channel: search ads often get 3% to 6%, display and social ads well under 1%. How to judge yours against the…
Related in the AI glossary
Frequently asked questions
- How is CPC calculated?
- Total ad spend divided by total clicks. $750 / 300 clicks = $2.50 CPC.
- What is a good CPC?
- It depends on the industry and what a customer is worth. A $40 CPC can be fine for a law firm whose clients are worth $5,000, and terrible for a $30 product.
- Why did my CPC go up?
- Usually more competition in the auction, a lower Quality Score after ad or page changes, or seasonal demand such as the holiday season for retail.
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