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What is Cost per Click? CPC Definition, Formula, and Examples
Cost per click, usually shortened to CPC, is the amount an advertiser pays for each click on an ad. It is one of the core metrics in paid search, paid social, display advertising, and performance marketing.
CPC tells you how expensive traffic is, but it does not tell you whether that traffic is valuable. A cheap click can still be wasteful if visitors do not convert, and an expensive click can be profitable if it brings high-value customers.
CPC formula
The basic formula is:
CPC = total ad spend / total clicks
If you spend $1,000 and receive 500 clicks, your average CPC is $2.
Ad platforms may also show max CPC, target CPC, or actual CPC depending on bidding strategy. In analytics reporting, average CPC is usually enough to compare campaign efficiency.
CPC and conversion rate
CPC should be read with conversion rate and revenue. For example:
| Campaign | CPC | Conversion rate | Cost per conversion |
|---|---|---|---|
| Campaign A | $1 | 1% | $100 |
| Campaign B | $4 | 8% | $50 |
Campaign B has a higher CPC, but a lower cost per conversion. That makes it more efficient if conversion value is similar.
How to improve CPC outcomes
You can improve paid traffic performance by refining targeting, improving ad relevance, aligning landing pages with search intent, tracking UTM codes correctly, improving page speed, and measuring conversions beyond the first click.
Swetrix helps you evaluate paid traffic by connecting campaign tags, landing pages, conversion goals, funnels, performance, and revenue analytics. This makes it easier to see whether paid clicks are creating real business value.
Related terms: UTM code, conversion rate, return on investment, and landing page.
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