Cost Per Click (CPC)
The amount an advertiser pays each time a user clicks on their online advertisement.
Definition
Cost per click (CPC) is a digital advertising metric representing the price paid for each click on an ad. In PPC advertising platforms like Google Ads, advertisers set maximum CPC bids, and actual CPCs are determined through real-time auctions considering bid amounts, quality scores, and competition.
CPC varies dramatically by industry, keyword competitiveness, and platform. Legal and insurance keywords can exceed $50 per click, while less competitive niches may see CPCs under $1. Understanding and optimizing CPC is crucial for advertising ROI.
Why It Matters
CPC directly impacts advertising profitability. Lower CPCs mean more clicks and potential conversions for the same budget. Improving quality scores, ad relevance, and landing page experience can reduce CPCs while maintaining or improving ad position.
For budget-conscious marketers, CPC analysis reveals which keywords and campaigns deliver efficient traffic versus those bleeding budget. Smart CPC management can double campaign effectiveness without increasing spend.
Examples in Practice
A law firm reduced their average CPC from $85 to $52 by improving quality scores through better ad copy and landing page alignment, stretching their monthly budget 40% further.
An e-commerce brand discovered that broad match keywords had 3x higher CPCs than exact match with similar conversion rates, reallocating budget accordingly for better ROI.
A local service business found that mobile CPCs were 30% lower than desktop while converting equally well, shifting 60% of budget to mobile-only campaigns.