Cost Per Click (CPC)

Cost Per Click (CPC) is a digital advertising model where advertisers pay a fee each time their ad is clicked.

Why it matters

Helps manage advertising budgets effectively.
Directly links ad spend to user engagement.

How to measure

Calculate by dividing total ad spend by the number of clicks.
Typically measured over daily, weekly, or monthly periods.

Details

CPC is a crucial metric for mobile engineers and growth teams as it directly impacts the cost-effectiveness of advertising campaigns. By understanding CPC, teams can optimize their ad spend by focusing on high-performing ads that generate more clicks at a lower cost. In mobile contexts, CPC is particularly relevant for app install campaigns, where each click can lead to a potential download and user acquisition.

To optimize CPC, it is essential to target the right audience, use compelling ad creatives, and continuously test and refine ad placements. Mobile engineers can leverage analytics tools to track CPC performance and make data-driven decisions to enhance campaign effectiveness.

Examples & formulas

For example, if an advertiser spends $100 on a campaign that results in 50 clicks, the CPC would be $2 per click.

CPC = Total Ad Spend / Number of Clicks

Common mistakes

Ignoring click quality: Ensure clicks are from genuine users, not bots.
Overlooking ad relevance: Poorly targeted ads can lead to high CPC without conversions.