Cost per click (CPC) is an advertising pricing model in which the advertiser pays each time a user clicks on their ad, rather than paying for impressions served. It ties cost to a concrete signal of user interest — the click — making it a popular model for performance-oriented campaigns focused on driving traffic to a website, landing page, or offer. CPC is calculated by dividing total ad spend by the number of clicks: spend $1,000, get 500 clicks, and your CPC is $2.
 

CPC sits between pure reach pricing (CPM) and pure outcome pricing (CPA) on the performance spectrum. With CPM, the advertiser pays for exposure regardless of response; with CPC, they pay only when a user actively engages by clicking; with CPA, they pay only when a user completes a conversion. CPC is attractive because it filters out passive impressions — you're not paying for ads nobody interacts with — while still being easier to deliver and optimize than conversion-based pricing.
 

The model is foundational to search advertising and widely used in display, social, and native programmatic. The actual CPC an advertiser pays depends on factors like competition for the audience or keyword, the quality and relevance of the ad, the targeting, and the bidding strategy. In auction-based systems, more competitive audiences and high-demand placements drive CPC up, while well-optimized, relevant ads can lower it.
 

For advertisers, CPC is a useful efficiency metric for top-of-funnel goals like generating site visits, but it should never be the final measure of success. A low CPC that brings unqualified or non-converting traffic wastes budget just as surely as a high CPC. The clicks have to lead somewhere valuable. That's why CPC is best analyzed alongside click-through rate (CTR), conversion rate, and ultimately cost per acquisition (CPA) and return on ad spend. The full chain — impression to click to conversion — reveals whether cheap clicks are actually producing business outcomes.
 

CPC also makes ads vulnerable to click fraud, where bots or bad actors generate fake clicks to drain a competitor's budget or inflate a publisher's revenue. This makes invalid-traffic detection and verification important safeguards for any CPC campaign.
 

Used thoughtfully, CPC gives advertisers a clear, action-linked way to buy traffic and a sharp lever for optimization — favoring the ads, audiences, and placements that earn engagement at the lowest cost while keeping an eye on what happens after the click.