Cost-per-click (CPC) is an advertising metric where advertisers pay a fee each time the user clicks on their ad. It helps businesses track how much they are paying for user engagement. By measuring the clicks, advertisers can gauge the effectiveness of their ads, control costs, and improve campaign strategies.
Formula to calaclulate CPC ( cost per click):
Cost-per-click (CPC) =(Total Ad Spend / Total Clicks)
Dividing total ad spend by total clicks. :
A lower CPC value is preferred for cost efficiency, but a higher CPC means the market is paying more for the clicks. It may result in higher-quality conversions and better ROI.
Importance of CPC Metric for Marketers:
- CPC provides a clear link between ad spend and user interest.
- Allows advertisers to manage their budget effectively by setting bids per click.
- Helps assess which ads are driving the most user interaction.
- Marketers can calculate return on investment based on clicks and conversions.
CPC ensures payment when users engage, ideal for budget-conscious advertisers
