What Is Cost Per Click (CPC)?
Cost per click (CPC) is an online advertising revenue model that websites use to bill advertisers based on the number of times visitors click on a display ad attached to their sites.
The primary alternative is the cost per mille (CPM) model, which charges 1,000 ad impressions—or views—of the display ad, regardless of whether or not a viewer clicks on the ad.
The cost-per-click model is also known as pay-per-click (PPC),
- Websites bill advertisers based on cost per click, which is an online advertising revenue model.
- Content publishers often use a third-party company to create matches with advertisers.
- Google’s AdSense platform is one of the largest cost per click models.
Understanding Cost Per Click (CPC)
Advertisers commonly use cost per click with a set daily budget for a campaign. When the advertiser’s budget is reached, the ad is automatically removed from the website’s rotation for the remainder of the billing period. For example, a website with a cost-per-click rate of $.10 would bill an advertiser $100 for 1,000 click-throughs.
Most publishers use a third party to match them with advertisers. The largest such entity is Google Ads, which uses a platform called Google AdSense.
How Much Does a Click Cost?
A click costs no more than you’re willing to pay through a bidding system. For example, you could bid a maximum of $1 per click on Google Ads. The system runs through algorithms that evaluate your ads and charges you no more than your bid. However, there are some caveats.
The Google Ads system applies discounts to advertisers with higher ad Quality Scores. This score is determined by the relevance of the ad and the advertiser’s content to the search terms used. You’ll also be dinged in the position of your ad