Cost Per Click - CPC

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DEFINITION of 'Cost Per Click - CPC'

A website that uses CPCs would bill by the number of times a visitor clicks on a banner instead of by the number of impressions. Cost per click is often used when advertisers have a set daily budget. When the advertiser's budget is hit, the ad is removed from the rotation for the remainder of the period.

BREAKING DOWN 'Cost Per Click - CPC'

For example, a website that has a CPC rate of $0.10 and provides 1,000 click-throughs would bill $100 ($0.10 x 1000).

The amount that an advertiser pays for a click is usually set either by formula or through a bidding process. The formula used is often cost per impression (CPI) divided by percent click-through ratio (%CTR).

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