Cost per click (CPC)

CPC alone does not say whether money was well spent. Take two keywords. Keyword A costs £2.50 a click and 4 per cent of clicks become leads, so each lead costs £62.50. Keyword B costs £4.00 a click and 10 per cent become leads, so each lead costs £40. The pricier click is the cheaper lead. What decides profit is cost per conversion, which is CPC and conversion rate working together.

A rising CPC is also a signal in itself. It often means more competitors have entered the auction, or that demand has shifted with the season, or that the ad has become less relevant to the search.

• Match the ad text to the search term and send the click to a page built for that term. A better quality score lowers CPC directly.
• Add negative keywords so spend stops leaking to searches that will never buy, such as "free" when selling an enterprise product.
• Bid by value. Pay more for keywords known to convert and less for unproven ones.
• Watch CPC on a live dashboard, not at month end, so a spike on a key campaign is visible the day it happens.
• Judge each keyword by cost per conversion, then use CPC only to explain why that number moved.

CPC is spend divided by clicks. If £2,000 buys 800 clicks, the CPC is £2.50. In search advertising the price of a click is set by an auction. Advertisers bid, the platform scores each ad for quality and relevance, and the result decides both the ad's position and what each click costs. The CPC shown in a report is the average actual price, which is usually lower than the maximum bid the advertiser set.

• Cutting bids to chase a low CPC, which pushes the ad down the page and cuts volume.
• Comparing CPC across channels. A search click comes from someone looking for an answer, a social click often from someone scrolling, so the same price buys different intent.