Cost Per Click (CPC) represents the amount paid for each individual click on an advertisement within an online advertising campaign. It serves as a key performance indicator, directly linking advertising expenditure to audience engagement. For example, if an advertiser bids $1.00 CPC and receives one hundred clicks, the total cost would be $100.00. This metric provides a granular understanding of advertising efficiency.
The significance of this pricing model lies in its accountability. Advertisers only incur expenses when a user actively engages with their advertisement by clicking on it, differentiating it from impression-based pricing. Its origins are rooted in the evolution of online advertising, moving from a broad, less-targeted approach to a more precise and measurable system that maximizes return on investment. It allows for optimization based on real-time performance data.
