Digital marketing glossary
What is CPC (cost per click)?
Written and reviewed by L.K. Monu Borkala · Updated
Definition
CPC (cost per click) is the amount an advertiser pays each time someone clicks an ad. It is both a way of buying ads, where you are charged only when people click, and a metric: your average CPC is your total ad cost divided by the number of clicks you received over the same period.
How it works
On Google Search ads, you set a maximum CPC bid or let automated bidding set bids for you. Each time your ad is eligible, an auction decides whether it shows and in what position, based on your bid, the quality of your ad and other factors. With manual CPC bidding you are not charged more than your maximum bid for a click, and you often pay less, because you pay roughly what is needed to hold your position. Meta also reports cost per link click, though most Meta campaigns charge by impressions. A low CPC is useful only if those clicks still turn into customers.
Formula
CPC = Total ad cost ÷ Number of clicks
Example
Say a pest control service in Navi Mumbai spends ₹6,000 on Google Ads in a week and gets 400 clicks. Its average CPC is ₹15. If 20 of those visitors call and 8 book a ₹1,500 treatment, each booking cost ₹750 in ads. A competitor paying only ₹8 per click is not necessarily doing better. What matters is how many of those clicks turn into paying jobs, and at what cost.
An illustration: the business and the rupee figures are made up to show how the idea works.
Common mistake
Judging a campaign only by how cheap its clicks are. Broad keywords like 'pest control' can bring cheap clicks from people in other cities or looking for home remedies, while a specific keyword with a higher CPC may bring real customers. Compare CPC alongside conversion rate and CPA before you cut any keyword.
Where you learn it
- Module 1: Digital Marketing Foundations
- Class: Channels Overview: SEO, Social, Ads, Email, Content & Influencers · read it free
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