What is Cost per Click (CPC)?

Cost per click (CPC) is the amount of money you pay for 1 click in your ad campaign.

CPC's can vary widely between advertising platforms. For example, LinkedIn Ads tend to be more expensive and have higher CPC's than Facebook and Instagram Ads.

CPC's can also vary widely between campaigns. One campaign—targeted at a broader audience—could have a much lower CPC than a different campaign targeted at a niche audience.

Why does CPC matter to ad campaign performance?

CPC's matter a great deal to ad campaign performance. If you can lower your campaigns' CPC's over time—while still only targeting your Ideal Customer Profile—the cost you pay to acquire a customer or lead should also decrease.

Why? Because if you pay less money per click, then you can get more clicks from your budget, which gives you more chances to convert the people who clicked into customers or leads.

Let's look at a simple example. Let's say you have a $1,000 ad budget, and your average CPC is $20.00. This means that with your budget you will receive 50 clicks. If you have a 2% conversion rate on your website, this means 1 person who clicked an ad becomes a customer.

Now, if you're able to work hard and cut your average CPC to $10.00, with a $1,000 budget you will now get 100 clicks. Assuming a 2% conversion rate, you've now generated 2 customers instead of 1. A simple but powerful example to illustrate why CPC's matter to ad campaign performance!

How can you calculate CPC?

Calculating CPC is simple. You can use the above calculator to do it. Or, you can calculate it by dividing the total amount you've spent on your ad campaign by the total number of clicks it has generated.