Performance

Cost per click (CPC)

Also known as: cost per click · average CPC

Definition

Cost per click is the amount an advertiser pays each time someone clicks an ad, worked out as total spend divided by total clicks. In auction platforms it is an outcome of competition and ad quality, not a fixed price list.

You set a maximum bid, or hand bidding to the platform, but the price of each click is settled in the auction. On Google, Ad Rank blends the bid with the quality of the ad and the landing page, so a better ad can hold the same position for less money. Average CPC is therefore a result you read afterwards, which is why a competitor's quoted CPC says nothing about what you will pay.

Cheap clicks aren't the goal. Say one campaign pays AED 3 a click and converts one visitor in 100, while another pays AED 12 and converts one in 10: the first costs AED 300 per conversion, the second AED 120. In a bilingual market those two campaigns could easily be the English and Arabic versions of the same service, so judge each against its own cost per conversion, never against a blended account average or somebody else's benchmark.

Formula

CPC = Total ad spend ÷ Total clicks

More in Performance

A/B testing

A/B testing compares two versions of one element, such as a headline, an offer or a page, by showing each to a randomly split share of traffic at the same time and measuring which produces more conversions. It needs enough traffic and one change at a time.

Ad fatigue

Ad fatigue is the decline in an ad's performance as the same people see it repeatedly, usually visible as rising frequency and falling click-through rate before cost per result climbs. The remedy is fresh creative or a wider audience, not a bigger budget.

Ad Rank

Ad Rank is the value Google Ads calculates in each auction to decide whether an ad is eligible to show and where it sits against others. It combines the bid with ad and landing page quality, minimum thresholds, competition, search context and the expected impact of assets.