Glossary

What is CPC (cost per click)?

Q: Why is my CPC rising?

Usually competition, seasonality, or a falling [click-through rate](/resources/glossary/click-through-rate-ctr) — most auctions reward relevance, so a creative that stops resonating raises your price as well as lowering your volume.

CPC is a pricing model in which the advertiser pays a set fee each time a user clicks their ad. No click, no charge — which shifts the risk of an uninteresting ad onto the publisher.

Pricing and return

All 220 terms

What CPC buys

The advertiser pays for an action rather than an exposure. That feels safer than CPM, and it is — for exactly one step of the funnel.

Everything after the click is still entirely the advertiser's risk. A click that bounces costs the same as one that converts, which is why CPC campaigns with poor landing experiences burn budget efficiently and profitably for everyone except the advertiser.

What CPC optimises for

Both sides optimise toward clicks, and clicks are easier to produce than value. Publishers are rewarded for placements that attract clicks regardless of what follows; advertisers are rewarded for creative that provokes clicks regardless of qualification.

The predictable outcome is a drift toward curiosity-driven clicks — the ambiguous headline, the placement adjacent to a control the user meant to tap. It is not fraud, and it produces traffic that does nothing.

The defence is measuring past the click. Conversion rate by source, and cost per outcome rather than cost per click, will separate the sources sending qualified traffic from the ones sending volume.

CPC on AI surfaces

CPC works where a placement carries a link, and there is real inventory priced this way today. Its limitation on this surface is structural rather than operational.

A large share of AI-driven influence produces no click. A user reads a recommendation, absorbs the brand, and acts later — through search, direct, or an agentic conversion with no browser involved. Under CPC that influence is free to the advertiser and unpaid to the publisher, which is comfortable in the short term and misprices the inventory badly.

For a buyer the practical consequence is that CPC systematically understates what AI media is doing. Pairing it with a holdout is what reveals the difference — see measuring AI assistant ad performance honestly.

Common questions

Is CPC safer than CPM?

For one step only. It guarantees you pay for engagement rather than exposure, and guarantees nothing about quality. A high-CPC source sending traffic that converts beats a cheap one that does not.

Why is my CPC rising?

Usually competition, seasonality, or a falling click-through rate — most auctions reward relevance, so a creative that stops resonating raises your price as well as lowering your volume.

More in pricing and return

What a campaign costs to run, and what it gives back.

Back to the glossary