Cost-per-click (CPC) is a metric that determines the amount of money it costs an advertiser to bring a user to their website or landing experience from a paid digital channel. The cost is accrued each time an ad is clicked, whether it's a text ad on Google, a sponsored LinkedIn post, or other paid media channels. To calculate CPC, follow the simple equation below:
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\n Because CPC is influenced by factors like keyword competitiveness, ad quality, and bidding strategies, it's a crucial metric eCommerce marketers use to analyze how well their campaigns are performing—as well as forecast future ad performance.
Let’s break this down. A high CPC often suggests that you may need to adjust your ad quality or bidding strategy to lower costs and improve cost efficiency. On the other hand, a low CPC generally indicates that your ads are performing well in terms of cost efficiency.
Something you might hear on a typical call with a marketer is, "Our shopping campaign for T-shirts is seeing a lower CPC than last month." In other words, the campaign is more cost-effective in driving traffic to the brand’s T-shirt products than it was the previous month.
When looking at CPC, it's important to consider your available budget and overall campaign goals. Not sure how to optimize your campaigns? Reach out to our experienced team today.
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