Metrics
CPC (Cost Per Click)
Cost per click is the amount paid for a single click on an ad, reported as an average across a keyword, ad group, or campaign.
In practice
CPC is the price of entry, not the price of a customer. It is set by the auction: what competitors bid, how Google rates your quality, and the position you end up in. Legal and insurance keywords carry very high CPCs because a single client is worth a great deal; a niche hobby product can run on cents.
The mistake is optimizing for a low CPC on its own. Cheaper clicks on lower-intent queries produce a worse cost per acquisition than expensive clicks on buyers. The right frame is CPC divided by conversion rate, which is cost per conversion, and that is the number budgets should be judged on.
That said, CPC inflation is worth watching. A rising average CPC with flat conversion rate means a more crowded auction or a Quality Score decline, and both have fixes. Under Smart Bidding, individual CPCs swing widely by design; watch the average and the cost per conversion, not the outliers.
Why it matters
It sets the cost of traffic, but only matters in combination with conversion rate.
See it in a real accountMcNally Law: $100+ clicks in personal injury, and cost per lead cut from $404 to $58
RELATED TERMS
CPA (Cost Per Acquisition)
Cost per acquisition is total ad spend divided by the number of conversions, giving the average cost to produce one defined outcome such as a sale, lead, or sign-up.
Quality Score
Quality Score is Google's 1 to 10 diagnostic rating of a keyword based on expected click-through rate, ad relevance, and landing page experience, indicating how well the ad and page match the searcher's intent.
CTR (Click-Through Rate)
Click-through rate is clicks divided by impressions, expressed as a percentage, showing how often people who saw an ad chose to click it.
Written by Ilya Bulychev, Founder, Live PPC Ads. Part of the PPC Glossary.
Rather have someone handle this for you?
Every account we manage is optimized every business day through Ad Campaign Concierge™. Limited roster, by application.