Cost Per Click (CPC)

Definition

The cost or cost-equivalent paid per click-through.

Information

The terms pay-per-click (PPC) and cost-per-click (CPC) are sometimes used interchangeably, sometimes as distinct terms. When used as distinct terms, PPC indicates payment based on click-throughs, while CPC indicates measurement of cost on a per-click basis for contracts not based on click-throughs.

For example, consider a campaign where payment is based on impressions, not clicks. Impressions are sold for $10 CPM with a click-through rate (CTR) of 2%.

1000 impressions x 2% CTR = 20 click-throughs

$10 CPM / 20 click-throughs = $.50 per click

Synonyms

sometimes synonymous with pay-per-click (PPC)

Related Terms

click-through, click-through rate (CTR), cost-per-action (CPA), CPM, customer acquisition cost, pay per click (PPC)

Articles

Overture Says Forget CPC, What’s Your ROI?
Search Engine Watch (July 1, 2002)

Google Takes On Overture With Pay Per Click Ads
Search Engine Watch (March 4, 2002)

Beware the Lure of the Cost per Click
ClickZ (December 28, 1999)