CPC, or Cost Per Click, is the fee you pay a host site every time your ad is clicked.
Your cost per click is determined by several factors, including
- Your Maximum Bid
- Quality Score
- Competitiveness of the Keyword
- Ad Quality of Your Competitors’ Ads
Anytime you start a PPC campaign, you must determine if the CPC makes sense for your product. For example, if you sell products for $10 each earning $3 profit per sale, a CPC of $5 would mean you were losing money on a per click basis. However, you also must consider other metrics such as Customer Lifetime value (CLV) and Average Order Value (AOV) to determine whether the term you are bidding on will be profitable.