Cost Per Click (CPC)

Definition

CPC, or Cost Per Click, is a digital advertising metric that measures the amount an advertiser pays each time a user clicks on their ad. It’s a foundational metric in paid search, display advertising, and social media campaigns, allowing marketers to understand the cost of driving traffic to a website or landing page.

Why It Matters

CPC plays a big role in understanding how efficiently your paid campaigns are running. Keeping an eye on this metric helps marketers fine-tune bidding strategies, make smarter budget decisions, and see how different channels stack up against each other. When managed well, CPC ensures you’re driving quality traffic without wasting spend, ultimately protecting ROI and improving return on ad spend (ROAS).

Example

A company runs a Google Ads campaign with a total budget of €1,000 and receives 500 clicks. The CPC is €2 (€1,000 ÷ 500 clicks). By analysing this metric alongside conversion rates, the company can determine if the traffic is translating into leads or sales and adjust targeting, ad creatives, or bid strategies to improve performance.

Additional Insights

CPC is influenced by several factors, including industry competition, keyword demand, ad quality, and how precisely you target your audience. Competitive keywords usually come with a higher price tag, but they can also bring in traffic that’s more likely to convert. To get a clear view of performance, CPC should be considered alongside metrics like cost per acquisition (CPA), click-through rate (CTR), and conversion rate. Lowering CPC without losing quality often comes down to refining targeting, improving ad relevance, and making smart use of negative keywords.

Bottom Line

CPC is a key metric for understanding the cost of driving traffic through paid clicks. When monitored and optimised effectively, it helps businesses attract the right audience, stretch their budgets further, and improve overall campaign ROI.