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 really overmuch an advertiser pays each clip personification clicks connected their ad. And it’s 1 of nan astir important metrics successful online advertising. 

Why?

Because CPC affects your return connected finance (ROI). So, your return mightiness personification to beryllium alternatively precocious if nan keyword is expensive.

To springiness you a consciousness of conscionable really costly keywords tin be, we searched our keyword database to find nan astir costly position that sewage astatine slightest 100 searches per play betwixt June 2024 and November 2024. 

Here’s a sample of immoderate of nan results:

Keyword	Average Monthly Search Volume	Average CPC
chrome msi	523	$1,351
goformz	4,933	$1,000
rue & ziffra	428	$869
olay website	125	$695
computer imagination betterment services	185	$654
mass tort definition	290	$381
verizon 4 lines family plan	198	$355
estee lauder website	150	$255

In galore cases, these position correspond valuable opportunities for nan advertiser because there’s bully imaginable for searchers to buy. 

And successful immoderate cases, nan advertiser tin capitalize connected a competitor’s marque nickname to coming themselves arsenic a viable alternative. 

Now that you cognize overmuch astir why CPC matters, let’s get into nan details.

How CPC Works

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

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

This bid represents nan highest magnitude you're consenting to net for a azygous click connected your ad. The existent costs per click is often small than your maximum bid.

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

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

In nan suit of show ads, your advertisement tin show up connected websites aliases apps that personification contented related to your chosen advertisement placements. Like this:

You don't net point until personification really clicks connected your ad. And nan magnitude you net per click depends connected factors like: 

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

To get nan astir retired of CPC ads, you petition to return nan correct keywords aliases advertisement placements, create compelling ads, and optimize your landing pages to personification visitors into customers. 

Pros and Cons of CPC Advertising

CPC advertizing enables you to net only for clicks and provides measurable results. It too comes pinch challenges for illustration precocious title and imaginable click fraud. Here are immoderate of nan main pros and cons:

Pros of CPC Advertising

• Custom targeting: You tin guarantee your ads scope nan group astir apt consenting successful your products by targeting circumstantial keywords, demographics, locations, and devices. This targeted onslaught improves your chances of conversion.
• Pay only for clicks: CPC ads title you erstwhile personification clicks connected your ad. So you locomotion money only erstwhile there's a chance of attracting a imaginable customer to your website.
• Control your budget: You tin group your maximum bid and regular budget. This elasticity allows you to group your locomotion based connected your ads' performance—for complete control.
• Measurable results: Cost-per-click advertizing provides elaborate analytics that measurement really galore clicks, impressions, and conversions your ads receive. So you tin understand your ads' effectiveness affirmative really to optimize them for improved results.

Cons of CPC Advertising

• Competitive marketplace: In highly competitory markets, costs per click tin beryllium high—especially for sought-after keywords and advertisement placements. Which tin beryllium challenging for mini businesses pinch constricted budgets competing against larger companies.
• Risk of click fraud: Some clicks connected your ads mightiness recreation from bots aliases competitors looking to deplete your budget. Click fraud tin effect your campaign’s effectiveness and your wide budget.
• Requires continuous optimization: To get nan astir retired of your CPC campaigns, you must regularly show and tweak various aspects for illustration advertisement copy, keywords, and landing pages. It’s an ongoing, tedious process you can’t debar if you want to support effective campaigns.
• Learning curve: Successfully mounting up and managing CPC campaigns requires a coagulated knowing of integer advertizing principles and individual advertisement platforms. Beginners whitethorn personification a steep learning curve earlier they tin optimally negociate campaigns.

CPC vs. CPM

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

When deciding betwixt CPC and CPM, spot your advertizing goals, target audience, and budget.

CPC is often nan amended premier to thrust targeted postulation and conversions. CPM is overmuch suitable for expanding marque vulnerability and reaching a wider audience.

Here's a speedy comparison betwixt nan two:

Factors	CPC	CPM
Pricing	Pay per click	Pay per 1,000 impressions
Focus	Encourages nonstop narration pinch nan ad	Focuses connected wide vulnerability and visibility
Best for	Driving actions for illustration income aliases signups	Builds marque consciousness and visibility
Cost	Varies based connected title and advertisement quality	Fixed, mostly small than CPC
Budget Flexibility	Allows for precise money powerfulness based connected clicks	Budget often requires a larger first finance for wide reach
Measurement	Metrics attraction connected actions (clicks)	Metrics attraction connected impressions (views)

Types of CPC Ads

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

Search Ads

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

They tin show up astatine nan apical aliases bottommost of nan SERP. And typically spot a headline, description, and URL. Here’s what they look like:

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

Display Ads

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

Here’s an illustration from Investopedia’s website:

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

You’ll beryllium tin to target users based connected their demographics, interests, and behaviors. Ensuring your relationship reaches nan correct people.

Shopping Ads

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

Shopping ads target users who are actively searching for nan products you sell.

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

Further reading: Conversion Rate Optimization: 9 Tactics That Work

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

These ads tin return various forms—like sponsored posts, carousel ads, aliases 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 nan astir consenting successful your products aliases services.

Retargeting Ads

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

Using cookies, these ads "follow" your past visitors crossed nan web and work your ads connected various platforms and websites they visit.

They enactment arsenic reminders, encouraging users to return and complete a purchase.

Retargeting ads typically personification precocious conversion rates because they target users already acquainted pinch your product. They tin beryllium text, image, and video-based.

Ad platforms for illustration Google and Meta relationship robust retargeting capabilities.

How to Calculate Cost Per Click

Cost per click is calculated by dividing nan afloat costs of an advertisement by nan afloat number of clicks.

The CPC look looks for illustration this:

Cost per click = afloat advertisement costs / afloat number of clicks 

For example, if you spent $100 connected a PPC tally and sewage 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 less ways to find a keyword's mean costs per click. Here are respective devices that tin help: 

Semrush

Find a keyword’s CPC pinch Keyword Overview. 

Start by entering your keyword and clicking “Search.”

You’ll spot nan keyword’s CPC successful nan array branded “CPC.”

That’s nan mean worth advertisers net for a personification to click connected an advertisement triggered by nan keyword successful Google Ads.

If, connected nan different hand, you’re conducting keyword research, Keyword Magic Tool will too show each keyword’s mean CPC successful nan “CPC” column.

Like so:

Google Keyword Planner

Google Keyword Planner is simply a free keyword investigation instrumentality for hunt campaigns. 

It tracks and collects accusation consecutive from Google Ads. And it’s a awesome spot to find a keyword’s mean costs per click. 

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

You’ll spot a style pinch 2 options: “Start pinch keywords” aliases “Start pinch a website.”

Stay connected nan “Start pinch keywords” tab, participate nan keyword, and click “Get results.”

You’ll spot a array pinch nan keyword you provided and a database of related keyword ideas. 

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

Here’s what each record means:

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

The mean CPC for each keyword whitethorn vary. 

Use nan ranges to spot really overmuch you’d (roughly) petition to bid for your advertisement to look astatine nan apical of nan SERPs. 

How to Lower CPC 

Here are a less tips to thief you small your costs per click and make nan astir of your campaigns.

1. Improve Your Quality Score

Google’s Quality Score is simply a metric of really bully your advertisement compares pinch different advertisers. 

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

1. Expected CTR: The likelihood that personification will click connected your ad 
2. Relevance: How intimately your advertisement matches a user’s hunt intent
3. Landing page experience: How applicable your landing page 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 nan “Keywords” drop-down successful Google Ads, and past “Search keywords.” 

Then, click nan “Columns” icon. 

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

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

And click “Apply.”

Now you’ll spot columns for “Quality Score” and nan different elements to thief you understand precisely what you petition to fix.

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

Make Your Ads More Relevant

The overmuch applicable your ad, nan overmuch its chances of landing successful beforehand of group consenting successful seeing it. And nan overmuch probable that they’ll click connected it. 

One measurement to make your ads overmuch applicable is to debar wide advertisement groups that surface aggregate keyword groupings. 

Focus connected creating respective highly targeted advertisement groups.

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

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

Each of those advertisement groups should target moreover overmuch circumstantial keywords. 

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

You’ll astir apt create overmuch advertisement groups (and overmuch ads) this way. 

But nan trade-off is that your ads will beryllium overmuch applicable to nan keywords you're bidding on—which tin thief raise your Quality Score.

Optimize Your Landing Page 

The worth of your landing pages tin personification a ample effect connected your effectiveness and budget.

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

• Be relevant. Visitors who click connected your advertisement should beryllium directed to a page related to what they searched for. If nan page isn’t relevant, nan personification will apt leave.
• Write clear copy. Know really to represent transcript that intelligibly explains nan intent of your page.
• Keep it simple. Don’t portion users to click aggregate links to find what they’re looking for. 
• Provide a bully personification experience. Keep your landing page accessible and accordant pinch your advertisement copy. 

Increase Your CTR

Click-through title (CTR) measures nan percent of group who click connected your advertisement aft seeing it.

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

Here are a less tips to amended your CTR:

• Use assets (previously Google Ads extensions) to spot further accusation for illustration telephone buttons, location information, and links to circumstantial parts of your tract incorrect your ad
• Use a CTA like “buy,” “order,” aliases “sign up” to entice users to click
• Make advertisement matter compelling by highlighting perks for illustration free shipping aliases exclusive deals
• Match personification intent by penning transcript that addresses nan 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 bladed to personification comparatively small monthly hunt volumes than caput position and medium-tail keywords.

But they’re often easier to rank for, small expensive, and awesome astatine driving highly targeted traffic. 

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

Enter nan keyword you want to target and click “Search.” 

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

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

Like this:

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

3. Set Up a Negative Keywords List

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

Implementing antagonistic keywords tin importantly trim costs. You won’t beryllium wasting your money 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 position group hunt for that aren’t applicable to your campaign. 

Check nan instrumentality adjacent to nan keywords you’d for illustration to adhd arsenic antagonistic keywords, and click “Add arsenic antagonistic keyword.” 

Then, you tin return to adhd them to an advertisement group, campaign, aliases antagonistic keyword list. 

Keyword Magic Tool too helps you find antagonistic keywords. 

Enter your seed keyword and click “Search.”

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

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

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

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

This maneuver will thief you support and amended your mean costs per click while driving higher conversions.

For example, let's opportunity you tally a conception edifice that offers proscription services. 

You find your ads execute champion during luncheon and repast hours erstwhile group are overmuch inclined to bid food. 

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

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

And schedule your ads accordingly.

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

Then, click nan pencil icon and premier nan tally to create an advertisement schedule for. 

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

5. Apply Geotargeting

Geotargeting allows you to target circumstantial countries, areas incorrect a country, a radius astir a location, aliases location groups (such arsenic places of liking aliases your business locations).

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

For instance, if you tally a conception activity business (like a plumbing company), you mightiness want to target only nan circumstantial cities aliases regions wherever you operate.

This way, your ads look to imaginable customers incorrect your activity area. You debar wasting your money connected clicks from group who are excessively acold distant to usage your services.

On nan different hand, if you personification an e-commerce shop that ships products nationwide you mightiness find that definite states aliases regions personification a higher conversion title than others.

In this case, you could usage geotargeting to summation your bids for nan astir profitable locations. While reducing your bids aliases excluding locations pinch a small conversion rate.

To group up location targeting, click “Show more” > “Locations” successful Google Ads.

Then, click nan bluish “pencil” icon and participate nan punishment of nan location you’d for illustration to target. Hit “Save.” 

6. Test Different Keyword Match Types

Keyword lucifer types powerfulness really intimately nan keyword needs to lucifer nan searcher’s query for nan auction to spot and trigger your ad. 

Here are 3 lucifer types: 

• Broad match: Ads tin show for searches related to your keyword
• Phrase match: Ads look successful searches that spot nan meaning of your keyword
• Exact match: Ads show erstwhile searches personification nan aforesaid meaning aliases intent arsenic your keyword

You could usage wide lucifer to show your advertisement to a wider assortment of searchers. Or opt for nonstop lucifer to target a overmuch circumstantial group.

What does this mean for your PPC campaign?

Exact lucifer keywords bladed to beryllium overmuch targeted (and relevant) but personification higher CPC. Broad lucifer keywords are small targeted (less relevant) but personification small CPC.

Use a diligent cognition of each lucifer type. And consistently optimize your campaign. 

7. Make Device Adjustments

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

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

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

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

Make targeted bid adjustments by clicking nan pencil icon successful nan “Bid adj.” record and mounting your ads to target circumstantial devices. 

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

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

You tin easy do that pinch nan Advertising Research tool. 

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

The first aboveground will show keywords your competitor is bidding on. 

Along pinch each keyword’s ranking position successful paid search, costs per click, and different adjuvant metrics. 

Like this:

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

Click connected a “Keywords” drop-down to unfastened a array pinch nan 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 nan astir you’re consenting to net per click. You group this successful your Google Ads account.

When choosing your max CPC bid, return nan highest magnitude you deliberation each click is worth. If personification clicks connected your ad, you won’t net overmuch than your max CPC.

A higher bid mostly helps your advertisement show successful a higher advertisement position connected nan page.

But you mostly only petition to net nan minimum amount—as agelong arsenic you deed competitors.

What Is Average Cost Per Click?

Average costs per click is nan afloat costs of each your clicks divided by nan afloat number of clicks.

Total costs of clicks / afloat number of clicks = avg. CPC

Let’s opportunity your advertisement sewage 2 clicks: One click costs $1, and nan different costs $3. Your afloat costs for immoderate clicks is $4.

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

$4 / 2 = $2

What Is Actual Cost Per Click?

Your existent CPC is nan magnitude you’re yet charged for a click. 

Typically, you’ll net overmuch small than your maximum costs per click bid. Because you only petition to net nan minimum required magnitude to deed competitors instantly beneath you. 

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

Ad Rank is nan group that decides wherever your advertisement appears connected nan 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 really your advertisement compares pinch competitors’ CPC ads. A higher group (measured 1-10) intends your advertisement and associated landing page are overmuch adjuvant to users than your competitors’ ads.

Expected CTR, advertisement relevance, and landing page relevance effect an ad’s Quality Score.

So, if your advertisement meets nan worth play and you’re bidding enough, you personification a chance of appearing supra competitors.

What Is a Good Cost Per Click?

The correct CPC varies crossed industries, platforms, and your circumstantial trading objectives. 

Generally, industries specified arsenic ineligible and finance mightiness spot higher CPC owed to competition. Others, for illustration acquisition and retail, whitethorn spot small costs. 

It's champion to recovered your ain benchmarks of a "good" CPC by hunt your advertizing capacity complete clip and continually moving to amended your results.

What Is Manual Cost Per Click?

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

Manual bidding is simply a awesome onslaught if you already cognize which keywords get overmuch clicks and conversions. Manually group a higher money for those keywords.

What Is Enhanced Cost Per Click?

Enhanced CPC (ECPC) lets you make nan astir of your manual CPC strategy by automatically adjusting manual bids if a click seems overmuch apt to lead to a discarded aliases conversion.

ECPC is simply a cognition 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 clip to group bids for nan highest chance of a conversion for nan champion price.

In short, ECPC helps you get nan champion worthy for a conversion.

What Is Automated Bidding?

Automated bidding is simply a strategy that allows Google to automatically group bids based connected nan probability of your advertisement resulting successful a click aliases conversion.

For example, Google tin automatically group a higher money for competitory keywords if you’re adjacent to nan apical 3 paid hunt positions.

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

If you group up your tally utilizing nan Semrush Ads Launch Assistant app, you tin return your business goal—like “Increase website visitors” aliases “Increase aliases stabilize awareness.” The app will impulse a tailored bidding strategy to thief you attain that peculiar objective. 

With nan app, you'll too get nan apical matching keywords for your campaign, connected pinch auto-generated headlines, advertisement copy, extensions, and UTM tags.