What is CPC and how to calculate it?

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CPC

What is a CPC?

Cost per click (CPC) measures the cost of each click on your ads. This metric directly impacts the budget and efficiency of online advertising campaigns. Understanding CPC allows marketers to assess how much they pay for each site visitor. As a result, they can optimize budget allocation and adjust strategy. A lower CPC means you're getting more traffic for less money. So, your campaign's ROI goes up.

How to calculate CPC?

To calculate cost per click (CPC), divide the total cost of your advertising campaign by the number of clicks the ad received.

Total Ad Spend / Total Clicks

What is bad CPC?

A bad cost per click significantly exceeds the industry average value without corresponding to a higher conversion rate or revenue. It's a clear indicator of inefficiency in ad spend. For instance, a CPC above $3 in the technology sector can be considered high if it doesn't lead to proportionate conversions. In contrast, a CPC over $1 can be unfavorable for consumer goods due to lower average transaction values. Factors defining a bad CPC include high costs with low ad performance, poor targeting, and low ad quality scores.

What is good CPC?

A good cost per click (CPC) represents a low cost relative to the value of a click. It balances affordability with quality traffic. A reasonable CPC varies by industry due to differences in competition and customer value. For instance, the legal industry might see a higher average CPC due to high customer lifetime value, often exceeding $6. At the same time, in retail, you can have a lower CPC, around $1 to $2, due to higher volume and lower average order values. A good CPC allows you to use budget effectively for optimal ad performance. This leads to maximizing ROI by attracting high-quality clicks at a minimal cost.

Our key templates to track CPC

PPC multi-channel dashboard

All-in-one marketing dashboard in Looker Studio

Flex Hard: Your PPC 2024 Wrapped - dashboard in Looker Studio

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How to improve CPC?

Improve Quality Score

Enhance the relevance of your ads, keywords, and landing pages. A higher quality score leads to a lower CPC, as search engines reward relevant, high-quality ad experiences.

Keyword Optimization

Focus on long-tail keywords that are less competitive but highly relevant to your audience. This strategy can lower your CPC by targeting more specific searches.

Ad Copy Refinement

Create compelling and relevant ad copy that resonates with your target audience. Well-crafted ads improve click-through rates (CTR). This can positively influence your CPC by demonstrating ad relevance to search engines.