Digital Lexicon Hub

An advertising pricing model in which the advertiser is charged when a user clicks an advertisement.

PPC ties cost to measurable actions, so budgets can be tracked down to the click and compared with lead or sales value, which helps decide how much to invest in each campaign or keyword.

A campaign records 2,000 clicks at a total cost of $3,000, so the average CPC is $1.50. With 60 sales at $150 average order value, revenue is $9,000 and return on ad spend is 3 to 1.

Paying per click does not mean paying for results, since clicks can come from low-intent users or invalid traffic. Smart bidding can exceed manual maximum CPCs, and click costs vary widely by industry and auction competition.

In a PPC model, an advertiser sets a maximum cost per click or uses automated bidding, and the ad enters auctions on search engines, social platforms or display networks. In Google Ads, the actual CPC is usually the minimum needed to clear Ad Rank thresholds and beat the next competitor below. Average CPC equals total cost divided by total clicks, and it is reported alongside CTR and conversion rate.