Cost Per Click (CPC)
Cost per click is the amount an advertiser pays each time someone clicks a paid ad. In an auction-based platform like Google Ads, the actual CPC is set dynamically by the ad rank of the competitor below you divided by your quality score, plus a small increment, so it is often lower than your maximum bid.
Why It Matters
CPC is the price of buying traffic. Combined with conversion rate and average order value, it determines whether a campaign is profitable. Watching CPC trends flags rising competition or slipping ad quality before they drain the budget.
Common Mistake
Chasing the lowest CPC as if cheap clicks were the goal. A slightly higher CPC on a high-intent keyword that converts often beats bargain clicks that never buy. Optimize for cost per conversion, not cost per click.