What is cost per click?

Cost per click is a pricing model where you pay every time a user clicks on your online ad. It is used in channels like Google Ads, social ads and other paid media to measure how expensive each visit you buy actually is.

In digital marketing, cost per click, often shortened to CPC, is both a metric and a bidding strategy. As a metric, it tells you the average price you paid per click over a period or campaign. As a bidding method, you set how much you are willing to pay for a single click, for example in search engine advertising or social campaigns.

How do you calculate cost per click?

The formula for cost per click is straightforward. You divide the total media cost by the total number of clicks generated in the same period. In other words, cost per click = total cost / total clicks. If you spent €1,000 and received 500 clicks, your CPC is €2.

Platforms like Google Ads or Meta Ads calculate the actual CPC in real time in the auction. You usually pay less than your maximum bid, depending on competition, Quality Score or relevance and the expected click through rate.

Why cost per click matters for e-commerce and B2B

For growth focused e-commerce and B2B teams, cost per click is a key input to understand if paid traffic can scale profitably. On its own, CPC does not tell you if a campaign is successful. You need to compare your CPC with metrics such as conversion rate, revenue per click and customer lifetime value to see if the traffic you buy is worth the price.

For example, a higher cost per click can still be healthy if the traffic converts strongly or drives high value leads. A very low CPC with poor conversion can be a waste of budget. Smart teams use CPC as one piece of the performance puzzle, not the only target.

Cost per click versus other models

Cost per click is different from CPM, where you pay per 1,000 impressions regardless of clicks. CPC is usually better when your goal is clear actions like website visits, add to carts or form submissions. CPM can be more suitable when you focus on pure visibility or brand awareness at scale.

Many advertisers combine CPC campaigns in search with social or display campaigns that run on CPM. This gives you both performance oriented traffic and top of funnel reach in one media mix.

How to improve your cost per click

  • Increase ad relevance and Quality Score to win auctions at a lower CPC.
  • Refine keyword and audience targeting to cut expensive, low intent traffic.
  • Test new ad creatives and messages to boost click through rate.
  • Improve landing pages so higher conversion offsets a higher cost per click.
  • Shift budget into channels or campaigns with stronger revenue per click.

Taken together, these actions help you pay less for the wrong clicks and more confidently for the right ones, which is exactly how teams at 6th Man optimise paid media performance for e-commerce and B2B brands.

Using cost per click to make better decisions

To use cost per click well, look at it alongside other metrics in your dashboards and reports. Track CPC by channel, campaign, device and audience segment, then connect it to results such as leads, revenue and margin.

When you treat cost per click as a lever, not a vanity metric, it becomes a powerful tool. It allows you to decide where to push budget, where to cut and where expert help, such as a specialist search engine advertising team, can unlock profitable growth.