Cost per click
CPC / average CPC / actual CPC / cost-per-click
Cost per click is what you pay each time someone clicks your ad. You set a maximum you are willing to pay, and the auction usually charges less: Google says advertisers are often charged less, sometimes much less, than that maximum. It is the unit your ad invoice is built from.
If you run search ads, cost per click is the number your invoice is built from. You set a maximum bid, which is the most you are willing to pay for one click. What you actually pay is settled in an auction each time someone searches, and Google calls that figure your actual cost per click: the final amount you are charged for a click.
The two numbers are rarely the same. Google's own help page says advertisers are often charged less, sometimes much less, than their maximum, because you pay only what is minimally required to clear the Ad Rank thresholds and beat the advertiser immediately below you. One exception is worth knowing: your cost can go above your maximum when Enhanced CPC or a bid adjustment is switched on.
This is also why raising your bid does not simply buy a better spot, whatever a sales pitch might imply. Google names six things that decide Ad Rank: your bid, the quality of your ads and landing page, the Ad Rank thresholds, how competitive the auction is, the context of the search, and the expected impact of your assets and formats. Your bid is one of the six.
In practice
Say your maximum is set to 20 dollars and last month's report shows an average cost per click of 14 dollars 30 across 60 clicks. That is 858 dollars of spend, and the 20 dollar figure never appears on the invoice at all. Treat that as an example, not a benchmark. What a click costs in your trade, in your city, on your keywords, is whatever the auction settles on.
Not the same as
- Maximum CPC bid
- That is the ceiling you set. Cost per click is what you were actually charged, and it is usually lower.
- Cost per lead
- You pay for the click whether or not the person calls, fills in a form or books anything. Cost per lead counts only the ones who got in touch.
Why it matters to you
On its own, cost per click tells you almost nothing about whether the advertising works. A 30 dollar click that books a 9,000 dollar job is cheap. A 4 dollar click that books nothing is expensive. Judge the number against what a finished job is worth to you, not against a benchmark borrowed from another industry.
What to ask or check
- 01What was my average cost per click last month, and what is my maximum bid set to?
- 02Which keywords take the most spend, and did any of them turn into actual work?
- 03Is Enhanced CPC or a bid adjustment switched on, which can take a click above my maximum?
What people get wrong
That a lower cost per click is always better. Cheap clicks from people who were never going to buy cost more than expensive clicks from people ready to hire. The number to watch is what you paid for the work you won.
Where you will see it
In Google Ads and Microsoft Advertising as Avg. CPC on the campaign, ad group and keyword tables, and on any monthly report an agency sends you.
Where we fit
Managing Google and Microsoft ad accounts is one of the things we do. If you want a second pair of eyes on what your clicks cost and what they returned, that is the kind of work we take on.
See how we do it