How to calculate cost per click
Average cost per click is the total cost of your clicks divided by the number of clicks. That is Google Ads’ definition of average CPC[1] and Microsoft Advertising’s.[2]
- Average CPC$1.50
- Clicks per $10066.7
- Conversion rate4%
- Cost per conversion$37.50
The average is what you paid, not what you bid. In an auction your maximum CPC is a ceiling; the actual price is often lower. To see how many clicks a daily budget buys at your average CPC, use the Google Ads calculator.
CPC from CPM and CTR
When ads are bought per thousand impressions, the effective CPC is the CPM divided by the clicks those 1,000 impressions produce. Meta reports CPM as spend ÷ impressions × 1,000,[3] so this conversion puts a social buy and a search buy on the same footing.
| CPM | 0.5% | 1% | 2% | 4% |
|---|---|---|---|---|
| $5 | $1.00 | $0.50 | $0.25 | $0.13 |
| $10 | $2.00 | $1.00 | $0.50 | $0.25 |
| $20 | $4.00 | $2.00 | $1.00 | $0.50 |
| $40 | $8.00 | $4.00 | $2.00 | $1.00 |
Doubling CTR halves the effective cost of a click at the same CPM, which is why creative testing pays. The CPM calculator and CTR calculator give the two inputs.
From CPC to cost per conversion
Cost per conversion is CPC divided by conversion rate. Google Ads calculates conversion rate as conversions divided by interactions,[4] so at $1.50 a click and a 4% conversion rate, each conversion costs $37.50. The CPA calculator shows the most a conversion can cost before it loses money, and textbooks tie the chain together from impressions to sales.[5]
CPC mistakes
- Comparing CPC across goals. A brand-awareness campaign optimised for reach will show a high CPC by design. Compare CPC only between campaigns chasing clicks.
- Using max CPC as the cost. Bids are ceilings; plan with the average CPC from reports.
- Cheap clicks that never convert. A $0.20 click with a 0.1% conversion rate costs $200 per conversion; a $3 click at 5% costs $60.
Not affiliated with Google, Microsoft or Meta. Platform names are trademarks of their owners and appear only to identify whose documentation we cite.
Frequently asked questions
How do you calculate CPC?
Total cost ÷ clicks. $450 ÷ 300 clicks = $1.50 per click.
How do I convert CPM to CPC?
CPC = CPM ÷ (1,000 × CTR). A $15 CPM at a 1% CTR = $15 ÷ 10 = $1.50 per click.
How many clicks will $1,000 buy?
$1,000 ÷ CPC. At $2.50 a click, 400 clicks.
Is average CPC the same as max CPC?
No. Max CPC is your bid limit; average CPC is what you actually paid per click, usually less.
Sources
- Average cost-per-click (Avg. CPC): Definition
- Report attributes and performance statistics (CTR, average CPC, conversion rate, ROAS)
- CPM (cost per 1,000 impressions)
- Conversion rate: Definition
- Principles of Marketing, 14.3 The Use of Metrics to Measure Advertising Campaign Effectiveness (ROAS, conversion rate)