CPC is a common advertising metric used to measure the cost of each click on an ad. Essentially, it's the amount of money paid every time someone clicks on an ad and is redirected to a website. CPC is used in a variety of digital advertising channels, including Google Ads, Facebook Ads, and more.
CPC is important, because it directly impacts the overall cost of your advertising campaigns. The lower your CPC, the more traffic you can get for your budget, which can ultimately lead to more conversions and revenue. On the other hand, if your CPC is too high, you may not get enough traffic to generate a positive return on investment.
There are a number of ways to calculate CPC. The formula we prefer is as follows:
CPC = Paid Marketing Expense / Website Traffic
For example, a company is running a paid marketing campaign to drive traffic to its website. During the campaign, the company spent $1,000 on advertising, which resulted in 400 visits to the website. The cost per click based on website traffic would be:
CPC = $1,000 / 400 visits = $2.50 per visit
So in this example, the cost per click based on website traffic is $2.50 per visit. This means that the company is paying an average of $2.50 for every visit to their website that resulted from the paid marketing campaign.