What is cost per click?

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Cost per Click (CPC)

What is cost per click? This metric shows how much a marketer pays whenever someone clicks their ad. Along with the variety of other campaign measurements, CPC is an essential building block for understanding campaign effectiveness. 

How does cost per click work? As one of the clearest outcome-based metrics, setting the price each time someone clicks on the ad is all about campaign clarity and efficiency. The amount you pay for each click can vary, and it's determined through auctions or agreements with the platform where the ad is shown. CPC helps advertisers know how much they spend to bring visitors to their website or promote their products online.

Types of cost per click:

  • Target CPC: This is the highest amount an advertiser is willing to pay for a click.
  • Actual CPC: This is the average amount an advertiser pays for a click.

Why is cost per click important to marketers? Aside from ensuring campaign efficiency and effectiveness, CPC identifies which keywords and phrases perform best when it comes to driving traffic to their websites.

How to measure cost per click: To arrive at the estimate CPC provides, you start by dividing the total cost of a campaign by the number of clicks. For example, if a campaign costs $10,000 and generates 1,000 clicks, the CPC would be $10.

Who needs to know what cost per click is:

  • Digital marketing manager
  • Paid search specialist
  • Social media manager
  • Content marketing manager
  • Affiliate manager
  • E-commerce manager
  • Product manager
  • Marketing analyst
  • Brand manager

Use cost per click in a sentence: “Impressions matter, but they can be unclear, so more advertisers are leaning toward Cost Per Click, because that metric shows what they're really getting for their money.”