Varos Glossary

Cost Per Click (CPC)

What is CPC?

To put it simply, under the cost-per-click (CPC) model of internet advertising, the advertiser pays the publisher a fixed amount regardless of how many times a visitor interacts with the ad.

In pay-per-click (PPC) advertising, the cost per click (CPC) is the sum of all individual clicks. The cost per click is therefore an extremely relevant indicator for the advertising industry.

With a lower CPC, a company may achieve its marketing objectives with less investment. However, if the CPC is too high, the campaign may not generate enough profit to justify its costs (ROI).


Alternatively referred to as the "pay-per-click" model is a popular advertising strategy. However, it may be said that CPC and PPC advertising is really just two faces of the same coin.

PPC stands for "pay-per-click" and refers to a specific kind of sponsored advertising. Alternatively, "cost per click" (CPC) is more often used to suggest a monetary number by which both publishers and advertisers may assess the value of their digital marketing efforts.

Major ad platforms like Amazon Ads, Google Ads, and Microsoft Ads have popularized the PPC ad strategy.

Importance of CPC

There are a plethora of uses for understanding cost per click.

Cost-per-click is a helpful key performance indicator for gaining insight into

  • Cost-per-click (CPC)- based and budget-specific estimates of ROAS are provided.
  • Spending plans should be used to predict traffic levels.
  • How your typical CPC stacks up against the competition.
  • The power of your ads in comparison to others.

As you can see, the information provided by cost per click goes well beyond the simple calculation of how many clicks your money buys.

If you know your cost per click, you can make better predictions about your return on ad spend, and if your daily budget is little but your cost per click is large, for instance, your website visitors will have to work considerably harder for their ROI.

It's essential that the website's UX be thoroughly optimized to drive as many purchases as possible.

Why is it crucial to consider the cost per click? You may use this information to see how you stack up against the competition in keyword auctions.

If your maximum CPC is much lower than that of your rivals, this might be a significant explanation for the persistently poor click measurement of your adverts.

Both the prominence and effectiveness of advertisements are affected by their CPCs.

If your ad's cost per engagement is poor despite having compelling material and a smooth user interface, you may determine that your maximum CPC is too high.

Should click-through rate (CTR) by your primary KPI for your marketing campaign? Most likely not.

While it is an important metric, there are others that are more crucial to measuring the effectiveness of a campaign.

Types of Ads

CPC is used in the paid advertising industry for a wide range of ad formats, including text, rich media, and social media. Google's Search Network and the Display Network are two examples of specialized ad platforms.

Ad formats that take CPC into account are:

  • Text Messages Ads
  • Picture Ads
  • Video Ads
  • Tweets Ads
  • Facebook Ads
  • LinkedIn Ads
  • Instagram Ads

Calculate CPC

The CPC of an advertising campaign is the total amount spent on that campaign divided by the total number of clicks it receives. AdWords, one of the most widely used PPC advertising platforms, displays the average cost per click (CPC) for keywords you bid on when displaying adverts.

Cost Per Click Calculator:

  • CPC = Ad Spend / Total Clicks

Depending on their objectives, marketers may choose to use tactics like enhanced cost per click or manual cost-per-click bidding inside paid advertising networks like Google AdWords.

The average CPC formula is:

  • Average CPC = Total Click Cost / Total Clicks


Paid search advertising, often known as cost-per-click (CPC) advertisements, comes in a wide variety of forms. In the end, the finest cost-per-click advertising network is the one that meets your current requirements.

In many ways, the CPC model is advantageous for both publishers and marketers. Knowing that they will only be charged when a user clicks on one of their ads is comforting for businesses. To top it all off, it provides a sustainable revenue strategy for publishers.