Attribution
Cost per click
Also called CPC.
Cost per click is media cost divided by clicks. It is what you pay, on average, each time someone clicks an ad.
How it is measured
Divide total spend by total clicks for the period. In auction systems the price per click varies by keyword, time, and competition, so the average hides a spread.
Check CPC by keyword or ad group, not just overall. A few expensive terms often drive the average.
Worked example
A florist spends $1,260 on search ads in the week before Mother's Day and gets 840 clicks. CPC is $1.50. The week before, CPC was $0.85 on 700 clicks.
The rise comes from competitors bidding on 'flowers delivered today'. The florist caps bids on that phrase, shifts money to 'peony bouquet' at $0.62, and still sells out of arrangements by Thursday.
How it differs
Cost per click prices a visit. Paid search is the channel that sells those clicks. The click price changes with competition and quality; the channel is where it plays out.
Common errors
Chasing a low CPC and losing conversions. Averaging across unrelated keywords. Ignoring invalid clicks. Comparing CPC across channels with different intent. Forgetting that CPC rises in peak weeks.
In practice
Break CPC out by keyword group and look at the cost next to conversion. Set bid caps for terms that eat budget. Look at the quality of landing pages for the expensive ones.