Quick brief
What to know before you calculate
A short read on the assumptions, trade-offs and definitions that shape the answer.
- CPC equals campaign cost divided by clicks.
- Average CPC should be read with CTR and conversion rate.
- Cheap clicks can still be expensive if cost per conversion is too high.
The CPC formula
Cost per click is calculated by dividing total campaign cost by total clicks. If a campaign spends GBP 500 and receives 1,000 clicks, the average CPC is GBP 0.50. The same formula works for paid search, paid social, display, affiliate traffic and other click-based campaigns.
Use total cost, not only media spend
For quick platform checks, media spend is usually enough. For business decisions, include the costs that genuinely belong to the campaign, such as agency fees, creative production or tracking tools. A CPC based only on ad platform spend can look better than the real commercial cost.
Compare CPC with CTR
CPC explains the cost of traffic, while click-through rate explains how often impressions become clicks. A higher CPM campaign can still produce a reasonable CPC if the click-through rate is strong. A low CPC can still be weak if the traffic has poor intent.
Move from CPC to cost per conversion
The next question is usually whether those clicks convert. Cost per conversion equals campaign cost divided by conversions, and conversion rate equals conversions divided by clicks. A campaign with a higher CPC can outperform a cheaper one if it converts at a much better rate.
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