Cost per click, usually written CPC, is the amount deducted from your advertising budget when somebody clicks your ad. An auction decides it every time a search happens, so it moves constantly.
What makes it go up or down?
- Competition. Legal, insurance and home services in a big city run several dollars a click. Niche business-to-business terms often run far less.
- Quality Score. Google rewards ads that match the search and lead to a relevant, fast page, by charging you less for the same position.
- Time and place. The same keyword can cost more on a Monday morning in Manhattan than on a Sunday evening upstate.
Why it is the wrong number to judge on
A cheaper click that never converts costs more than an expensive one that becomes a customer. Judge the account on cost per enquiry.
Why cost per click is not the number to judge on
Typically, we report cost per click alongside cost per enquiry in every Google Ads account we manage, so we never confuse the two.
For example, Google’s own guidance on the ad auction explains exactly how the auction calculates cost per click in real time.
Specifically, a high figure in a competitive category is not automatically a problem if the resulting customers are valuable enough. Similarly, it naturally rises across an industry over time as more competitors start bidding. Notably, chasing a lower number by bidding on irrelevant terms usually raises cost per enquiry instead.
However, an account can look efficient on this number alone while quietly losing money underneath it. Instead, treat every bid decision as a question about the customer at the end of it, not just the click.
Notably, tracking this number alongside the value of the customers it produces turns a confusing metric into a genuinely useful one within a single reporting cycle.
