Cost per click (CPC)
Cost per click (CPC) is the average amount paid for each click on an ad: total spend divided by clicks. On impression-priced social ads, CPC is a result of two other numbers: CPM and click-through rate. CPC equals CPM divided by (CTR × 1,000), so better creative lowers it without changing the bid.
Updated
Formula and example
CPC = spend ÷ clicks.
Example: $500 spent for 400 link clicks is a CPC of $1.25.
The CPM and CTR connection
If you pay $8 per thousand impressions and 1% of impressions click, you get 10 clicks per thousand, so each click costs $0.80. Double the CTR to 2% and the CPC halves to $0.40 at the same CPM.
This is why creative is a cost lever. The ad that earns more clicks per impression buys traffic more cheaply, even before auction effects are counted.
| CTR | Clicks per 1,000 impressions | CPC at $8 CPM |
|---|---|---|
| 0.5% | 5 | $1.60 |
| 1.0% | 10 | $0.80 |
| 2.0% | 20 | $0.40 |
When low CPC is a trap
Curiosity-bait creative can lower CPC by attracting clicks from people with no intention of buying. If CPC falls while conversion rate falls faster, the cost per acquisition rises. Judge CPC next to what the clicks go on to do.
Questions
- How is CPC different from CPM?
- CPM is the price of a thousand impressions; CPC is the price of each click. On impression-priced ads, CPC equals CPM divided by (CTR × 1,000).
- Why did my CPC go up when my CPM stayed the same?
- Your click-through rate fell. Fewer clicks from the same impressions means each click costs more, which often points to creative fatigue.