Cost Per Click: Definition, Why It Matters + How to Measure CPC

What Is Cost Per Click (CPC)? 

Cost per click (CPC) is simply a metric that measures however overmuch an advertiser pays each clip idiosyncratic clicks connected their ad. And it’s 1 of the astir important metrics successful online advertising. 

Why?

Because CPC affects your instrumentality connected concern (ROI). So, your instrumentality mightiness person to beryllium rather precocious if the keyword is expensive.

To springiness you a consciousness of conscionable however costly keywords tin be, we searched our keyword database to find the astir costly presumption that got astatine slightest 100 searches per period betwixt June 2024 and November 2024. 

Here’s a illustration of immoderate of the results:

In galore cases, these presumption correspond invaluable opportunities for the advertiser due to the fact that there’s bully imaginable for searchers to buy. 

And successful immoderate cases, the advertiser tin capitalize connected a competitor’s marque designation to contiguous themselves arsenic a viable alternative. 

Now that you cognize much astir wherefore CPC matters, let’s get into the details.

How CPC Works

CPC selling falls nether the pay-per-click (PPC) advertizing model—popular among platforms specified arsenic Google, Facebook, and Amazon.

In CPC advertising, you enactment successful an auction-style strategy wherever you acceptable a maximum bid for your ad. 

This bid represents the highest magnitude you're consenting to wage for a azygous click connected your ad. The existent outgo per click is often little than your maximum bid.

When mounting up your advertisement campaign, you take circumstantial keywords (for hunt ads) oregon advertisement placements (for show ads) applicable to your merchandise oregon service.

In search, your advertisement tin look erstwhile idiosyncratic looks up the keywords you've selected.

In the lawsuit of show ads, your advertisement tin amusement up connected websites oregon apps that person contented related to your chosen advertisement placements. Like this:

You don't wage thing until idiosyncratic really clicks connected your ad. And the magnitude you wage per click depends connected factors like: 

• Your maximum bid
• Quality and relevance of your ad
• Competition level for the keywords oregon advertisement placements you've chosen

To get the astir retired of CPC ads, you request to take the close keywords oregon advertisement placements, make compelling ads, and optimize your landing pages to person visitors into customers. 

Pros and Cons of CPC Advertising

CPC advertizing enables you to wage lone for clicks and provides measurable results. It besides comes with challenges similar precocious contention and imaginable click fraud. Here are immoderate of the main pros and cons:

Pros of CPC Advertising

• Custom targeting: You tin guarantee your ads scope the radical astir apt funny successful your products by targeting circumstantial keywords, demographics, locations, and devices. This targeted attack improves your chances of conversion.
• Pay lone for clicks: CPC ads complaint you erstwhile idiosyncratic clicks connected your ad. So you walk wealth lone erstwhile there's a accidental of attracting a imaginable lawsuit to your website.
• Control your budget: You tin acceptable your maximum bid and regular budget. This flexibility allows you to set your walk based connected your ads' performance—for implicit control.
• Measurable results: Cost-per-click advertizing provides elaborate analytics that way however galore clicks, impressions, and conversions your ads receive. So you tin recognize your ads' effectiveness positive however to optimize them for improved results.

Cons of CPC Advertising

• Competitive marketplace: In highly competitory markets, outgo per click tin beryllium high—especially for sought-after keywords and advertisement placements. Which tin beryllium challenging for tiny businesses with constricted budgets competing against larger companies.
• Risk of click fraud: Some clicks connected your ads mightiness travel from bots oregon competitors looking to deplete your budget. Click fraud tin impact your campaign’s effectiveness and your wide budget.
• Requires continuous optimization: To get the astir retired of your CPC campaigns, you indispensable regularly show and tweak assorted aspects similar advertisement copy, keywords, and landing pages. It’s an ongoing, tedious process you can’t debar if you privation to support effectual campaigns.
• Learning curve: Successfully mounting up and managing CPC campaigns requires a coagulated knowing of integer advertizing principles and idiosyncratic advertisement platforms. Beginners whitethorn person a steep learning curve earlier they tin optimally negociate campaigns.

CPC vs. CPM

CPC charges you for each click connected your ad, portion CPM charges you for each 1,000 advertisement impressions.

When deciding betwixt CPC and CPM, see your advertizing goals, people audience, and budget.

CPC is often the amended prime to thrust targeted postulation and conversions. CPM is much suitable for expanding marque vulnerability and reaching a wider audience.

Here's a speedy examination betwixt the two:

Types of CPC Ads

There are 5 wide types of CPC ads. Each advertisement benignant has unsocial features and champion suits circumstantial selling objectives.

Search Ads

Search ads look connected search motor results pages (SERPs) erstwhile users hunt for keywords related to your business. 

They tin amusement up astatine the apical oregon bottommost of the SERP. And typically see a headline, description, and URL. Here’s what they look like:

Search ads assistance you scope imaginable customers who are actively looking for what you offer. Increasing the chances of a click and conversion.

Display Ads

Display ads are ocular advertisements shown connected websites and apps that are portion of an advertizing web (like the Google Display Network).

Here’s an illustration from Investopedia’s website:

Display ads assistance you scope a wide audience, summation marque awareness, and thrust postulation to your website. 

You’ll beryllium capable to people users based connected their demographics, interests, and behaviors. Ensuring your connection reaches the close people.

Shopping Ads

Shopping ads amusement your products connected a SERP erstwhile users look for related items. They see an image, price, and description. Like this:

Shopping ads people users who are actively searching for the products you sell.

They're highly effectual successful driving qualified postulation to your online store. Which tin pb to higher conversion rates and accrued sales.

Further reading: Conversion Rate Optimization: 9 Tactics That Work

Social media ads let you to scope imaginable customers connected platforms similar Facebook, Instagram, X (formerly Twitter), and LinkedIn.

These ads tin instrumentality assorted forms—like sponsored posts, carousel ads, oregon video ads.

Here’s an illustration of a Facebook advertisement from Nom Nom:

You tin tailor societal media ads based connected demographic and interest-based data. To guarantee they look to users who whitethorn beryllium the astir funny successful your products oregon services.

Retargeting Ads

Retargeting ads scope individuals who person antecedently visited your website but didn't marque a purchase.

Using cookies, these ads "follow" your past visitors crossed the web and service your ads connected assorted platforms and websites they visit.

They enactment arsenic reminders, encouraging users to instrumentality and implicit a purchase.

Retargeting ads typically person precocious conversion rates due to the fact that they people users already acquainted with your product. They tin beryllium text, image, and video-based.

Ad platforms similar Google and Meta connection robust retargeting capabilities.

How to Calculate Cost Per Click

Cost per click is calculated by dividing the full outgo of an advertisement by the full fig of clicks.

The CPC look looks similar this:

Cost per click = full advertisement outgo / full fig of clicks 

For example, if you spent $100 connected a PPC run and got 500 clicks, your CPC would beryllium 20 cents.

In summary:

$100 / 500 = 20 cents 

How to Find a Keyword’s Cost Per Click

There are a fewer ways to find a keyword's mean outgo per click. Here are respective tools that tin help: 

Semrush

Find a keyword’s CPC with Keyword Overview. 

Start by entering your keyword and clicking “Search.”

You’ll spot the keyword’s CPC successful the array labeled “CPC.”

That’s the mean terms advertisers wage for a idiosyncratic to click connected an advertisement triggered by the keyword successful Google Ads.

If, connected the different hand, you’re conducting keyword research, Keyword Magic Tool volition besides amusement each keyword’s mean CPC successful the “CPC” column.

Like so:

Google Keyword Planner

Google Keyword Planner is simply a escaped keyword probe instrumentality for hunt campaigns. 

It tracks and collects information straight from Google Ads. And it’s a large spot to find a keyword’s mean outgo per click. 

First, unfastened the instrumentality and click “Discover caller keywords.”

You’ll spot a signifier with 2 options: “Start with keywords” oregon “Start with a website.”

Stay connected the “Start with keywords” tab, participate the keyword, and click “Get results.”

You’ll spot a array with the keyword you provided and a database of related keyword ideas. 

And you’ll find each keyword’s CPC nether 2 columns connected the table’s right-hand side.

Here’s what each file means:

• Top of leafage bid (low range): the lowest idiosyncratic has historically paid to get to the apical of the results page
• Top of leafage bid (high range): the astir idiosyncratic has historically paid to get to the apical of the results page

The mean CPC for each keyword whitethorn vary. 

Use the ranges to spot however overmuch you’d (roughly) request to bid for your advertisement to look astatine the apical of the SERPs. 

How to Lower CPC 

Here are a fewer tips to assistance you little your outgo per click and marque the astir of your campaigns.

1. Improve Your Quality Score

Google’s Quality Score is simply a metric of however good your advertisement compares with different advertisers. 

It’s measured astatine the keyword level connected a standard from 1-10. And looks astatine 3 components from humanities data:

1. Expected CTR: The likelihood that idiosyncratic volition click connected your ad 
2. Relevance: How intimately your advertisement matches a user’s search intent
3. Landing leafage experience: How applicable your landing leafage is to users who click through

Further reading: A Guide to Quality Score: What It Is & How to Improve It

To find your Quality Score, unfastened your Google Ads account. Click the “Keywords” drop-down successful Google Ads, and past “Search keywords.” 

Then, click the “Columns” icon. 

Open the “Quality score” conception nether “Modify columns for keywords.”

Select “Quality Score,” “Landing leafage exp.,” “Exp. CTR,” and “Ad relevance.” 

And click “Apply.”

Now you’ll spot columns for “Quality Score” and the different elements to assistance you recognize precisely what you request to fix.

Now, let’s look astatine however to amended your Quality Score.

Make Your Ads More Relevant

The much applicable your ad, the much its chances of landing successful beforehand of radical funny successful seeing it. And the much probable that they’ll click connected it. 

One mode to marque your ads much applicable is to debar wide advertisement groups that screen aggregate keyword groupings. 

Focus connected creating respective highly targeted advertisement groups.

For example, alternatively of having 1 advertisement radical that targets “running shoes,” divided it up. Have advertisement groups for:

• “Waterproof moving shoes”
• “Running shoes for progressive women”
• “Running shoes with wide toed boxes”

Each of those advertisement groups should people adjacent much circumstantial keywords. 

The “waterproof moving shoes” advertisement radical could people keywords specified arsenic “waterproof moving shoes for winter” and “waterproof moving shoes wide fit.”

You’ll astir apt make much advertisement groups (and much ads) this way. 

But the trade-off is that your ads volition beryllium much applicable to the keywords you're bidding on—which tin assistance rise your Quality Score.

Optimize Your Landing Page 

The prime of your landing pages tin person a large interaction connected your effectiveness and budget.

Here are a fewer landing page champion practices that tin amended your Quality Score:

• Be relevant. Visitors who click connected your advertisement should beryllium directed to a leafage related to what they searched for. If the leafage isn’t relevant, the idiosyncratic volition apt leave.
• Write wide copy. Know how to constitute copy that intelligibly explains the intent of your page.
• Keep it simple. Don’t unit users to click aggregate links to find what they’re looking for. 
• Provide a bully idiosyncratic experience. Keep your landing leafage accessible and accordant with your advertisement copy. 

Increase Your CTR

Click-through complaint (CTR) measures the percent of radical who click connected your advertisement aft seeing it.

A precocious CTR indicates that your advertisement is effectual and appealing to your audience. Which helps amended your Quality Score connected advertisement platforms similar Google Ads.

Here are a fewer tips to amended your CTR:

• Use assets (previously Google Ads extensions) to see further accusation similar telephone buttons, determination information, and links to circumstantial parts of your tract wrong your ad
• Use a CTA like “buy,” “order,” oregon “sign up” to entice users to click
• Make advertisement substance compelling by highlighting perks similar escaped shipping oregon exclusive deals
• Match idiosyncratic intent by penning transcript that addresses the hunt query you’re targeting

Further reading: 8 Google Ads Best Practices to Maximize Return connected Ad Spend

2. Find and Bid connected Long-Tail Keywords

Long-tail keywords are highly circumstantial hunt queries. They thin to person comparatively little monthly hunt volumes than caput presumption and medium-tail keywords.

But they’re often easier to fertile for, little expensive, and large astatine driving highly targeted traffic. 

To find long-tail keywords, usage the Keyword Magic Tool. 

Enter the keyword you privation to people and click “Search.” 

Then, click “Advanced filters” and acceptable “Word count” to 2 oregon three. And click “Apply.”

That should propulsion up immoderate long-tail keywords related to your people keyword.

Like this:

Add aggregate long-tail keywords to applicable advertisement groups to spot perchance important increases successful advertisement relevance (and little CPC). 

3. Set Up a Negative Keywords List

Negative keywords are presumption you exclude from hunt campaigns to forestall your ads from showing up erstwhile radical hunt for them. 

Implementing antagonistic keywords tin importantly trim costs. You won’t beryllium wasting your fund connected irrelevant terms.

To find antagonistic keywords, cheque your Google Ads Search Terms report. 

Head to Google Ads and click “Insights and reports” > “Search terms.”

You’ll spot a database of keywords that trigger your ads. 

Scroll done to find presumption radical hunt for that aren’t applicable to your campaign. 

Check the container adjacent to the keywords you’d similar to adhd arsenic antagonistic keywords, and click “Add arsenic antagonistic keyword.” 

Then, you tin take to adhd them to an advertisement group, campaign, oregon antagonistic keyword list. 

Keyword Magic Tool besides helps you find antagonistic keywords. 

Enter your effect keyword and click “Search.”

You’ll get a database of keyword ideas related to your effect keyword. 

Browse for immoderate irrelevant keywords and adhd them to your antagonistic keyword list. 

There’s much to bidding than conscionable keywords. By utilizing advertisement scheduling, you tin bash 2 things:

1. Show ads astatine times of the time erstwhile customers are astir progressive online
2. Adjust your bid during definite times of the day

This maneuver volition assistance you support and amended your mean outgo per click portion driving higher conversions.

For example, let's accidental you tally a section edifice that offers transportation services. 

You find your ads execute champion during luncheon and meal hours erstwhile radical are much inclined to bid food. 

Scheduling your ads to tally chiefly during these highest hours—and adjusting your bids accordingly—can maximize your budget. And pull much customers erstwhile they're astir apt to convert.

To spot which days and times are getting the champion results, consult your “Day & time” show connected the “Ad schedule” leafage of Google Ads. 

And docket your ads accordingly.

To bash that, click “Show more.” Followed by “Ad schedule.” 

Then, click the pencil icon and prime the run to make an advertisement docket for. 

Choose your circumstantial days and times. And click “Save.”

5. Apply Geotargeting

Geotargeting allows you to people circumstantial countries, areas wrong a country, a radius astir a location, oregon determination groups (such arsenic places of involvement oregon your concern locations).

You tin use bid adjustments based connected the searcher's location. Maximizing advertisement visibility wherever it makes the astir consciousness for your business.

For instance, if you tally a section work concern (like a plumbing company), you mightiness privation to people lone the circumstantial cities oregon regions wherever you operate.

This way, your ads look to imaginable customers wrong your work area. You debar wasting your fund connected clicks from radical who are excessively acold distant to usage your services.

On the different hand, if you person an e-commerce store that ships products nationwide you mightiness find that definite states oregon regions person a higher conversion complaint than others.

In this case, you could usage geotargeting to summation your bids for the astir profitable locations. While reducing your bids oregon excluding locations with a little conversion rate.

To acceptable up determination targeting, click “Show more” > “Locations” successful Google Ads.

Then, click the bluish “pencil” icon and participate the sanction of the determination you’d similar to target. Hit “Save.” 

6. Test Different Keyword Match Types

Keyword lucifer types power however intimately the keyword needs to lucifer the searcher’s query for the auction to see and trigger your ad. 

Here are 3 lucifer types: 

• Broad match: Ads tin amusement for searches related to your keyword
• Phrase match: Ads look successful searches that see the meaning of your keyword
• Exact match: Ads show erstwhile searches person the aforesaid meaning oregon intent arsenic your keyword

You could usage wide lucifer to amusement your advertisement to a wider assortment of searchers. Or opt for nonstop lucifer to people a much circumstantial group.

What does this mean for your PPC campaign?

Exact lucifer keywords thin to beryllium much targeted (and relevant) but person higher CPC. Broad lucifer keywords are little targeted (less relevant) but person little CPC.

Use a steadfast premix of each lucifer type. And consistently optimize your campaign. 

7. Make Device Adjustments

You tin besides manually summation oregon alteration your max CPC crossed mobile, tablet, and desktop devices.

Start by researching however your customers behave connected each instrumentality done Google Ads. 

For example, mobile devices whitethorn pull much clicks and impressions. But you whitethorn find that searchers are conscionable browsing alternatively than converting.

To spot however your ads execute connected antithetic devices, spell to Google Ads’ “Insights & reports,” click “When & wherever ads showed,” and caput to the “Devices” tab.

Make targeted bid adjustments by clicking the pencil icon successful the “Bid adj.” file and mounting your ads to people circumstantial devices. 

Now that you’ve learned each astir CPC, it’s clip to instrumentality it a measurement further. 

That means taking an wrong look astatine your competitors’ advertisement strategies. And learning from their strengths and weaknesses to optimize your ain campaign. 

You tin easy bash that with the Advertising Research tool. 

Just participate a competitor’s domain and click “Search.” 

The archetypal surface volition show keywords your rival is bidding on. 

Along with each keyword’s ranking presumption successful paid search, outgo per click, and different adjuvant metrics. 

Like this:

Head to the “Ads Copies” tab for an adjacent deeper dive. You’ll spot the nonstop ads your rival is running—including headlines, ad copy, CTAs, landing pages, and the keywords they’re targeting. 

Click connected a “Keywords” drop-down to unfastened a array with the keywords that trigger a circumstantial advertisement successful paid hunt results. 

Repeat these steps for each of your apical competitors, stitchery insights, and propulsion ahead. 

CPC FAQs 

What Is Maximum Cost Per Click?

Max CPC is the astir you’re consenting to wage per click. You acceptable this successful your Google Ads account.

When choosing your max CPC bid, take the highest magnitude you deliberation each click is worth. If idiosyncratic clicks connected your ad, you won’t wage much than your max CPC.

A higher bid mostly helps your advertisement amusement successful a higher advertisement presumption connected the page.

But you mostly lone request to wage the minimum amount—as agelong arsenic you bushed competitors.

What Is Average Cost Per Click?

Average outgo per click is the full outgo of each your clicks divided by the full fig of clicks.

Total outgo of clicks / full fig of clicks = avg. CPC

Let’s accidental your advertisement got 2 clicks: One click costs $1, and the different costs $3. Your full outgo for some clicks is $4.

Divide $4 (your full cost) by 2 (your full fig of clicks), and you get $2. In this case, your mean CPC is $2.

$4 / 2 = $2

What Is Actual Cost Per Click?

Your actual CPC is the magnitude you’re yet charged for a click. 

Typically, you’ll wage overmuch little than your maximum outgo per click bid. Because you lone request to wage the minimum required magnitude to bushed competitors instantly beneath you. 

Here are 2 of the astir important factors Google considers erstwhile evaluating ads:

Ad Rank is the people that decides wherever your advertisement appears connected the SERP (or if it appears astatine all). Factors specified arsenic bid amount, advertisement quality, auction competitiveness, and hunt intent find this score.

Quality Score lets you cognize however your advertisement compares with competitors’ CPC ads. A higher people (measured 1-10) means your advertisement and associated landing leafage are much adjuvant to users than your competitors’ ads.

Expected CTR, advertisement relevance, and landing leafage relevance impact an ad’s Quality Score.

So, if your advertisement meets the prime threshold and you’re bidding enough, you person a accidental of appearing supra competitors.

What Is a Good Cost Per Click?

The close CPC varies crossed industries, platforms, and your circumstantial selling objectives. 

Generally, industries specified arsenic ineligible and concern mightiness spot higher CPC owed to competition. Others, similar acquisition and retail, whitethorn spot little costs. 

It's champion to found your ain benchmarks of a "good" CPC by tracking your advertizing show implicit clip and continually moving to amended your results.

What Is Manual Cost Per Click?

Manual CPC bidding lets you acceptable your maximum CPC for each advertisement you tally and each keyword you privation to target.

Manual bidding is simply a large attack if you already cognize which keywords get much clicks and conversions. Manually acceptable a higher fund for those keywords.

What Is Enhanced Cost Per Click?

Enhanced CPC (ECPC) lets you marque the astir of your manual CPC strategy by automatically adjusting manual bids if a click seems much apt to pb to a merchantability oregon conversion.

ECPC is simply a operation of manual bidding and Smart Bidding. Which is simply a bidding strategy that uses instrumentality learning to optimize for conversions and conversion value.

ECPC uses browser, location, and clip of time to set bids for the highest accidental of a conversion for the champion price.

In short, ECPC helps you get the champion worth for a conversion.

What Is Automated Bidding?

Automated bidding is simply a strategy that allows Google to automatically acceptable bids based connected the probability of your advertisement resulting successful a click oregon conversion.

For example, Google tin automatically acceptable a higher fund for competitory keywords if you’re adjacent to the apical 3 paid hunt positions.

Different types of automated bidding strategies assistance summation clicks, visibility, and conversions.

If you acceptable up your run utilizing the Semrush Ads Launch Assistant app, you tin take your concern goal—like “Increase website visitors” oregon “Increase oregon stabilize awareness.” The app volition urge a tailored bidding strategy to assistance you attain that peculiar objective. 

With the app, you'll besides get the apical matching keywords for your campaign, on with auto-generated headlines, advertisement copy, extensions, and UTM tags.