💼 Cost-Per-Click (CPC) Models

Cost-Per-Click (CPC) Models#

Advertising pricing where payment is per click received.

Important

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What it is#

Cost-per-click is the pay-per-click (PPC) pricing model where an advertiser pays each time someone clicks their ad — total spend divided by clicks:

\[\text{CPC} = \frac{\text{ad spend}}{\text{clicks}}.\]

You pay for engagement, not mere exposure.

How it’s set#

CPC isn’t fixed — it comes out of an auction shaped by your bid, the ad’s quality score / relevance, and competition for the audience. A higher CTR signals relevance and typically lowers your CPC, so better creative pays for itself.

CPC vs CPM#

Under CPC you pay only when users act, making it ideal for traffic and conversion goals; under CPM (cost per thousand impressions) you pay for visibility regardless of clicks, better for awareness. The two connect: CPC is roughly CPM divided by (1000 × CTR).

Theme: Business & Growth Analytics · All terminology

Hint

Mind map — connected ideas

CTR (Click-Through Rate) · Conversion Rate (CR) · CAC (Customer Acquisition Cost) · Incremental Conversions · Conversion Rate Uplift · Paid CAC (Customer Acquisition Cost)

Hint

More in Business & Growth Analytics

Blended CAC (Customer Acquisition Cost) · CAC (Customer Acquisition Cost) · Cannibalization · Channel-Specific CAC (Customer Acquisition Cost) · Churn · Cohort · Cohort-Based LTV (Simple Version) · Conversion Rate (CR) · Cross-Selling · CTR (Click-Through Rate) · Customer Lifetime · Customer Segmentation · D2C (Direct-to-Consumer) · FTEs