costperclick

Cost per click (CPC) is an online advertising metric that charges advertisers for each click their ad receives. It is commonly used in paid search campaigns and social media advertising, and is part of pay-per-click models. CPC is distinct from cost per impression (CPM) or cost per acquisition (CPA), which are priced by impressions or conversions respectively.

CPC is typically calculated by dividing the total amount spent on a campaign by the number of clicks recorded. In practice, platforms report a maximum CPC bid, but advertisers often pay an actual CPC that is lower or equal to that amount. The actual CPC is influenced by auction dynamics and the quality of the ad, not solely by the bid.

In many platforms, such as search and social networks, ads compete in auctions. An advertiser sets a bid for a keyword or audience, and the platform determines an ad’s position based on the bid amount, the ad’s quality score, expected impact of ad extensions, and other factors. The winning ad is shown, and its actual CPC is calculated to exceed the next-best advertiser’s bid enough to win.

Several factors influence CPC: competition for the keyword or audience, the relevance and quality of the ad and landing page (quality score), expected click-through rate, device, location, and time of day. CPC is used to manage budgets, forecast costs, and evaluate campaign efficiency, but it should be interpreted alongside conversions and return on investment. Limitations include platform variation, potential click fraud, and the fact that CPC does not by itself reflect campaign value or profitability.