Cost Per Click (CPC) is the amount an advertiser pays each time someone clicks one of their ads, set through an auction where advertisers bid against each other for the same audience.
Also written as CPC.
CPC is the unit price of paid traffic. For a small business it determines how far a fixed ad budget stretches: a 5 dollar CPC buys 200 clicks from a 1,000 dollar budget, a 25 dollar CPC buys only 40.
CPC varies enormously by industry. Searches tied to high-value services like legal or trades work cost far more per click than low-stakes ones, which is why budget planning has to start from your real CPC, not a generic average.
You have levers on CPC. A better quality score, sharper targeting and stronger ad copy all lower what you pay, so CPC is partly a measure of how well the campaign is built.
A law firm bidding on the search lawyer near me might face an average CPC of 18 dollars, because the competition is fierce and each click is potentially worth thousands.
A cafe bidding on coffee near me might pay 1.50 dollars a click, because the value of one click is low and the auction is less heated.
Same platform, same mechanism, but the law firm's 1,000 dollar budget buys around 55 clicks while the cafe's buys around 660. Budget plans only make sense once you know your own CPC.
In-House manages bids and quality factors through the advertising agent so your CPC reflects a well-built campaign, not the auction's default price.