Cost per click (CPC)
Short definition
Cost per click (CPC) shows the average amount an advertiser pays for each click an advert receives.
CPC is calculated by dividing total ad spend by total clicks. On platforms such as Google Ads and Meta it is set through an auction, and rises for keywords and audiences with heavier competition. In demand-driven periods, such as a seasonal sale, the CPC for the same keyword can rise noticeably.
Quality score, ad relevance and expected click-through rate all feed into CPC directly; a more relevant advert on the same budget can draw more clicks at a lower CPC. For that reason CPC is read alongside the conversions it produces, not on its own. Lowering CPC in a lasting way usually means improving ad copy and targeting, not simply cutting the bid.
A low CPC does not always mean a good result; cheap traffic can also be irrelevant traffic. Reading it together with return on ad spend gives the fuller picture.
Why it matters
CPC determines how fast a budget is used up; a high CPC paired with low conversions means the budget runs out before it reaches the right audience. It is an early signal on campaign settings. A sudden rise in CPC is usually the first sign that the bidding strategy or the targeted audience needs a second look.
Illustrative example
When a workwear manufacturer switched from a broad keyword to a narrower phrase, cost per click fell and the enquiries that came in were better qualified.
