How to calculate average CPC
Average CPC = total ad cost ÷ number of clicks. A campaign that costs 5,000 kr and gets 1,000 clicks has an average CPC of 5 kr.
What sets the cost per click
In Google Ads you set a maximum CPC bid, or let automated bidding set it, and you usually pay less than the maximum. The actual price comes out of the auction: what competitors bid, the quality of your ad and landing page, and the Ad Rank needed to hold your position. Keywords in competitive, high-value industries such as law, insurance and finance cost far more per click than most.
How to lower your CPC
- Improve Quality Score with relevant ads and landing pages.
- Target more specific, long-tail keywords.
- Add negative keywords to cut irrelevant clicks.
- Adjust bids by device, location and time of day based on results.
A low CPC isn’t the goal in itself: what matters is the cost per lead or sale. Website owners who show Google AdSense ads also see a CPC figure: what they earn when a visitor clicks an ad on their site.
CPC example
A company sells accounting software. Its keyword “accounting software for small business” costs 12 kr per click, while “free invoice template” costs 2 kr. The cheaper keyword brings many visitors who never buy. After checking conversions, the company moves money to the more expensive keyword, whose cost per sale is lower.
How to lower your cost per click
- Improve your ad’s relevance to the search, which raises Quality Score and can cut the price you pay.
- Write ads that are clicked more often, because a higher click-through rate helps your position.
- Match each ad group to a tight set of keywords and a relevant landing page.
- Add negative keywords to avoid irrelevant clicks.
- Exclude locations, devices and times that do not convert.
CPC mistakes
- Choosing the cheapest clicks instead of the cheapest customers.
- Raising bids to chase first position without checking return.
- Ignoring fraud and accidental clicks on mobile.
- Judging CPC without looking at conversion rate.
CPC FAQs
What is a good CPC?
It depends on your profit per customer and conversion rate. See cost per acquisition and pay-per-click.
Do I always pay my maximum bid?
No. You usually pay less. The price depends on the auction. See CPM for the alternative pricing model.