Cost Per Click (CPC)

CPC = \frac{\text{Total Ad Spend}}{\text{Number of Clicks}}

On auction-based platforms like Google Ads or Meta, you usually do not set an exact CPC.

You typically:

Set a bid (the maximum you are willing to pay per click or per result).

The actual CPC you pay depends on:

You often pay less than your maximum bid.

Some platforms and placements offer fixed CPC buying, but auction-based pricing dominates performance channels.

CPC (Cost Per Click)

You pay when someone clicks.
The platform takes on more risk, since you do not pay for impressions that get zero engagement.

CPM (Cost Per Mille)

You pay per thousand impressions, whether or not people click.
Often used for awareness campaigns or when you care more about reach than clicks.

When CPC makes sense

You want direct response and care about traffic and conversions.

You prefer to pay only when someone actually engages.

When CPM can be better

Your goal is awareness or reach, not clicks.

Your ads naturally have a high CTR, so paying per impression can actually be cheaper than paying per click.

There is no universal "good" CPC. It varies by:

Industry and business model

Platform (Google vs Meta vs TikTok)

Keyword or audience competitiveness

Examples

Competitive B2B software keywords on Google can exceed $50+ per click.

Broad Facebook campaigns might achieve $0.50 CPC.

The number itself matters less than what happens after the click:

A $20 CPC that converts at 10% into a $2,000 sale is excellent.

A $0.30 CPC that never converts is wasted money.

CPC is a building block for CAC (Customer Acquisition Cost):

If CPC = $5

And 2% of clicks become customers

Then:

CAC from that channel = $5 / 2% = $250

Levers to improve economics:

Lower CPC (better quality scores, more relevant targeting, creative that drives cheaper clicks).

Improve conversion rate after the click (better landing pages, offers, onboarding).

Both paths reduce CAC and make paid acquisition more scalable.