Basics · also called CPC, pay per click, PPC
CPC (cost per click)
CPC (cost per click) is a pricing model where the advertiser pays only when someone clicks the ad, and also the average amount paid per click.
With cost per click, showing the ad is free; the advertiser pays when a person clicks it. This model is the backbone of search advertising, where platforms such as Google Ads and Microsoft Advertising run auctions on keywords and charge per click, and it is common in paid social and performance display.
The number also works as a metric: CPC = total cost ÷ number of clicks. It connects to CPM through CTR: effective CPM = CPC × CTR × 1,000. So an ad with a US$1 CPC and a 0.5% CTR is earning the publisher the equivalent of a US$5 CPM.
CPC shifts risk from the advertiser to the seller, which is exactly why it attracts click fraud: bots, click farms and competitors can generate paid clicks that never had any chance of converting. Platforms filter an invalid click before billing, but advertisers still watch for suspicious spikes, and many prefer CPA or ROAS targets that care about what happens after the click.
Think of it like this
CPC is like paying a flyer distributor only for the people who walk into your shop holding the flyer, not for every flyer handed out.
An example
A travel agency in Spain spends €3,000 on search ads and receives 2,400 clicks. CPC = 3,000 ÷ 2,400 = €1.25 per click.
Related terms
CTR (click-through rate)
CTR (click-through rate) is the percentage of ad impressions that result in a click, calculated as clicks divided by impressions, multiplied by 100.
CPM (cost per mille)
CPM (cost per mille) is the price an advertiser pays for one thousand ad impressions; "mille" is Latin for thousand.
Search advertising
Search advertising is placing paid ads alongside search engine results, triggered by the words people search for and usually charged per click.
Keyword bidding
Keyword bidding is choosing search terms your ads should appear for and setting how much you are willing to pay per click when someone searches for them.
Click fraud
Click fraud is generating fake or worthless clicks on pay-per-click ads, by bots, paid people or malware, to drain an advertiser's budget or inflate a publisher's earnings.