What is CPC (Cost Per Click)?

CPC (cost per click) is the average amount you pay each time someone clicks your ad. It tells you how expensively you are buying traffic before any of it converts.

Formula: CPC = Total Spend / Total Clicks

How it works

CPC is the output of an auction: it falls when your creative earns high engagement (platforms charge less to show ads people like) and rises with competition, audience narrowness, and creative fatigue. It matters because it is one of the two levers behind acquisition cost — CPA is essentially CPC divided by CVR. A cheap click is only valuable if the clicker can convert, so CPC is a cost signal, never a success metric on its own.

What to watch

• Good: CPC trending down as a new creative gains engagement and delivery efficiency
• Bad: CPC creeping up on a long-running ad — a classic fatigue symptom
• Bad: chasing the cheapest CPC into low-intent placements where nothing converts

In practice

The most reliable way to pull CPC down is fresher, more engaging creative, because the auction rewards ads people stop for. Generating batches of new UGC variations inside Claude with Polaris keeps a pipeline of fresh ads rotating in before rising CPC eats your margin. See the full ecommerce ads glossary, or put it into practice with the Polaris AI UGC ad generator.