CPC is the average cost paid for each ad click. Learn how CPC drives acquisition cost in a marketing KPI tree.
Cost Per Click (CPC) is Ad Spend ÷ Clicks. It is set by auction dynamics, quality score and competition. In a KPI tree, CPC sits on the cost side of the acquisition equation: CAC = (CPC × Clicks) ÷ New Customers, which simplifies to CAC = CPC ÷ Conversion Rate. This makes the trade-off explicit: rising CPC can be absorbed by improving on-site conversion, or it forces CAC up.