Average Cost Per Click / Marketing Terms Average Cost Per Click Average cost per click, often shortened to CPC, is a key metric in paid digital advertising that tells you how much you are paying, on average, for each click on your ad. It is calculated by dividing the total cost of your clicks by the total number of clicks received. For example, if your campaign spends $200 and generates 100 clicks, your average CPC is $2.00. This metric helps advertisers understand the cost-efficiency of their campaigns and compare performance across keywords, audiences or platforms. CPC can vary widely depending on factors such as industry, competition, keyword intent and audience targeting. Highly competitive sectors like legal services or enterprise software often have higher CPCs because more advertisers are bidding on the same keywords. Conversely, niche markets or branded keywords may have lower CPCs. Platforms such as Google Ads, Meta Ads Manager and LinkedIn Ads use real-time auctions to determine CPC, based on your bid, ad relevance and expected performance. A higher quality score can help lower your CPC even if your bid is not the highest. Tracking average CPC is essential for managing budget, forecasting results and evaluating return on ad spend. A lower CPC may suggest that your ad is well targeted and cost-efficient, but it should be viewed in context with other metrics like click-through rate and conversion rate. In nonprofit and B2B campaigns, where goals may include form submissions or donor signups, focusing only on CPC without considering outcomes can be misleading. The most effective campaigns balance cost per click with quality of traffic and overall conversion performance.