Cost Per Click (CPC) is the amount an advertiser pays each time a user clicks on an ad. It is the primary pricing model for search advertising (Google Ads) and a common metric across paid social (Meta, TikTok, Pinterest). CPC is calculated as:
CPC = Total Ad Spend / Total Clicks
If a Google Search campaign spends $2,000 and generates 500 clicks, the CPC is $4.00. CPC measures how efficiently a campaign is buying traffic, but it is only one piece of the performance picture - a low CPC with poor conversion rate still produces a high cost per acquisition. CPC is best understood as an input metric: it determines traffic cost, and conversion rate determines what that traffic is worth.
On Google Search, CPC is determined by keyword auction dynamics - your bid, your Quality Score (a measure of ad relevance and landing page experience), and competitor bids. High-intent commercial keywords in competitive categories (supplements, skincare, software) command significantly higher CPCs than informational or niche terms. On Meta and TikTok, CPC is a function of CPM (cost per 1,000 impressions) divided by click-through rate - so a lower CPM or a more engaging creative that drives higher CTR both reduce effective CPC.
CPC benchmarks vary enormously by category, platform, and targeting. Google Search CPCs for competitive categories can range from $1 to $15+; Meta CPCs for e-commerce audiences typically fall between $0.50 and $3.00. These averages are directional only - your actual CPC is a product of your specific keyword or audience targeting, bid strategy, and creative quality. Tracking CPC trends within your own account over time - rather than against industry benchmarks - is more actionable for optimisation decisions. CPC connects directly to PPC strategy and is one of the component metrics in the ROAS calculation.
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