Cost Per Click

What Does Cost Per Click Mean?

Cost Per Click (CPC) is the amount paid by an advertiser to a search engine or other Internet publishers for every time an advertisement viewer makes a click on a link in an advertisement. This click transfers the viewer to the advertiser’s web site.

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Techopedia Explains Cost Per Click

While CPC is the amount paid by advertisers to search engines, Pay Per Click (PPC) is the term for the the Internet advertising model. The price paid by advertisers to search engines–that is, the CPC–varies depending on the search engine involved and the competition level for a particular keyword.

That being said, PPC and CPC are often used synonymously.

There are various models for determining the CPC amount that advertisers pay.

Flat-rate PPC is when an advertiser pays the web site host only when their ad on the web site is clicked.
Bid-based PPC is when an advertiser agrees to a contract where they compete against other advertisers in a public auction. This auction is hosted by a publisher or more commonly an advertising network. The maximum amount an advertiser is willing to pay for a click on a given ad (often based on one or more keywords or phrases) is stipulated in the contract. Online tools are used and the auction is conducted automatically every time a visitor clicks on the link in the ad.
Such models allow bid management at scale; some have up to millions of PPC bids in a highly automated system which sets each bid to maximize profit or maximize traffic.

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Margaret Rouse
Technology Expert

Margaret is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical business audience. Over the past twenty years, her IT definitions have been published by Que in an encyclopedia of technology terms and cited in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine, and Discovery Magazine. She joined Techopedia in 2011. Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages.