CPC is what one click costs you at auction. Category-dependent, competition-driven, and meaningless on its own without conversion rate and price next to it.
Formula
CPC = Ad Spend / ClicksExampleSpend $50 on a campaign that gets 100 clicks, your average CPC is $0.50.
CPC is set by the auction, not by you - your bid is the ceiling, the competition sets the price. It varies wildly by category: commodity keywords with deep-pocketed competitors clear far higher than niche long-tail terms.
The mistake is optimising CPC in isolation. A $3 click that converts at 20% on a $60 product is cheap. A $0.40 click that converts at 2% on a $12 product is ruinously expensive. CPC only means something in the same sentence as conversion rate and price.
Read the spend-ceiling math CPC feeds into →