cost per click

Cost Per Click

The average amount paid each time someone clicks on a paid ad. Formula: total ad spend ÷ total clicks. The acronym CPC also exists as a stub entry; this entry provides full context.

When you'd see it: Search and social ad platforms (Google Ads, Meta, LinkedIn). Every paid channel where you're bidding for clicks in an auction. CPC rises as more advertisers compete for the same audience — competitive keywords in Google Ads can cost $50+ per click in industries like legal and insurance.

Why it matters: CPC sets the floor for your paid acquisition economics. If CPC is $10 and you convert 1 in 20 clicks, your cost per lead is $200 — before you factor in sales costs or close rates. High CPC is only a problem if conversion rates don't justify it. The goal is favorable CPC relative to the value of a converted customer, not low CPC in isolation.

Common mistakes: Chasing low CPC. Cheap clicks from unqualified audiences cost more in wasted sales effort than expensive clicks from buyers. CPC should be evaluated against the conversion rate and LTV of the resulting customers, not against the platform average. Also: confusing CPC with CPM — CPC is per click, CPM is per thousand impressions.

Related CPM, CTR, ROAS, CAC, cost per acquisition