What is cost-per-click?
Cost per click (CPC) is a term you’ll often come across in digital marketing, especially when running paid advertising campaigns. In general, it’s a pricing model where, as an advertiser, you pay each time a user clicks on your online ad.
To calculate CPC, divide the total cost of a digital advertising campaign by the number of clicks you receive on your ad. For example, if you spend $500 on a campaign and get 1,000 clicks, your CPC would be $0.50 ($500 / 1000 clicks).
Cost per click calculation = (Total cost/# of clicks)
CPC can help you assess the effectiveness and efficiency of your online campaigns, so you can optimize your strategies in the future for better ROI and performance. Comparing your CPC to the revenue generated from those clicks can give you a sense of your campaign’s ROI. If the revenue is higher than the cost, you’re on the right track.
Knowing your CPC also allows you to set a daily or campaign budget. If your CPC is high, you may need to adjust your keywords, ad copy, or targeting strategy to get more value from your spend.
For example, if you were a manufacturing company, you might decide to run a Google Ads campaign on behalf of your local partners to help them reach customers. By calculating CPC, you can figure out how much each click will cost, where to optimize, and expected ROI for these campaigns.
While it’s important to manage your CPC, don’t lose sight of your ultimate goal: driving profitable customer actions, not just clicks. At the end of the day, it’s the quality, not the quantity of clicks, that will truly make a difference for your sales.