Definition
Under CPC the publisher and network carry the risk of showing ads nobody clicks: an impression that produces no click produces no revenue. The model therefore goes with formats where the network can predict clicks and favour the creatives that earn them. Push, in-page push and native all work this way: the platform ranks competing ads by bid multiplied by expected click-through rate, so a better creative wins impressions at a lower bid.
Formula and a worked example
CPC = total cost ÷ clicks
Effective CPM (eCPM) = CPC × CTR × 1,000A push campaign bids a CPC of $0.02 and receives 15,000 clicks in a week from 3,000,000 notifications sent. Cost: $300. CTR: 0.5%. Expressed as an eCPM for comparison with a popunder campaign: $0.02 × 0.005 × 1,000 = $0.10 per thousand notifications. If 150 of the clicks converted, the cost per conversion is $2.00.
How CPC bids compete
Most CPC platforms rank ads by bid × predicted CTR, sometimes called ad rank or eCPM ranking. Two consequences for buyers: a stronger creative buys more traffic at the same bid, and a new creative with no history is shown a little to learn its CTR before it competes fully. Push and native networks publish a minimum CPC per GEO below which a bid is not accepted.
When CPC is the right model
When the creative carries the message and the landing page needs the visitor's intent: push, in-page push and native all pre-sell with a headline, so paying per click aligns the advertiser's cost with interest shown. CPC is less suitable when the goal is visibility rather than action, or when click fraud is a concern on an unvetted source; conversion-based tracking by source ID remains the control in both cases.
Related terms
| Term | Relation | Where defined |
|---|---|---|
| CPM | Impression-based alternative | Term page |
| CTR | Decides how much CPC traffic a creative gets | Term page |
| Push notification ads | The main CPC format on push networks | Term page |
| Native advertising | CPC format | Term page |
FAQ
What does CPC mean in advertising?
Cost per click: you pay for each click on your ad and nothing for impressions that do not lead to a click.
Is CPC better than CPM?
Neither is better in general. CPC fits formats where a headline pre-sells the click; CPM fits formats with no click to bill or where reach is the goal. Compare the two by cost per conversion.
Why does a better creative pay a lower CPC?
Because CPC platforms rank ads by bid multiplied by expected click-through rate; a creative that earns more clicks per impression wins the same impressions with a lower bid.