What is CPC (cost per click)?
How is CPC calculated?
Take what the clicks cost in total. Divide it by the number of clicks. That is your average CPC.
In Google Ads you set a maximum CPC bid: the most you are willing to pay for a click. What you are actually charged is the actual CPC, and Google says it is often less than the maximum1.
Two words get mixed up here. We use CPC for the price or metric: what one click cost. We use pay-per-click (PPC) for the billing model: you pay when someone clicks, not when the ad is shown. Same idea, different job.
Why does CPC matter, and where does it stop?
CPC tells you how much traffic your money buys. It says nothing about what that traffic does next. Nobody pays your bills with clicks.
Two campaigns can show the same CPC and very different results. One brings people who buy. The other brings people who look and leave.
Example (illustrative): Campaign A costs €1.00 per click and 1 click in 50 ends in an order. Campaign B costs €0.50 per click and 1 click in 200 ends in an order. A costs €50 per order. B costs €100 per order. The cheaper click is the dearer customer.
So CPC is a starting point. The next question is what a buyer cost, which is CPA (cost per acquisition): ad spend divided by the conversions the platform counts. After that comes ROAS (return on ad spend): conversion value attributed to ads divided by ad spend. It measures revenue, not profit.
For ZFD: A falling CPC next to flat orders is a saving on the wrong thing, so we read CPC next to cost per order and margin.
Worked example
Easily confused with
CPC (cost per click) vs CPM (cost per mille)
The cost of one thousand ad impressions: cost divided by impressions, times one thousand. You are charged for showings, not clicks.
CPC (cost per click) vs CTR (click-through rate)
Clicks divided by impressions, usually shown as a percentage. It tells you how often people click. It does not tell you what the click costs.
CPC (cost per click) vs CPA
The price of a conversion, not of a click.
FAQ
Is a lower CPC always better?
No. A low CPC can mean cheap traffic that rarely buys. Judge it next to cost per order and margin.
Is CPC the same as PPC?
Close. Google notes CPC pricing is sometimes called PPC1. We use PPC for the model where you pay per click, and CPC for the price of one click under that model.
How do I work out CPC?
Divide total click costs by the number of clicks over the same period. Same date range for both numbers.
Sources
- Cost-per-click (CPC): Definition - Google Ads HelpPrimary source
Let’s find what’s actually working.
Next step. Test what your ad numbers mean on explicit assumptions. Use the Is your ROAS real? calculator.