Cost per click (CPC) is the average price you pay each time someone clicks one of your paid ads. You calculate it by dividing total ad spend by the number of clicks over the same period. It is one of the most common ways to measure the cost efficiency of paid traffic across channels like Google Ads, Meta, and Microsoft Advertising.
How it works
The formula is simple: CPC equals total ad spend divided by total clicks. If you spend $500 and receive 250 clicks, your average CPC is $2.00. On auction based platforms, the actual price you pay per click depends on your bid, your competitors’ bids, and quality signals like ad relevance and landing page experience, so your realized CPC is often lower than your maximum bid.
Why it matters
CPC tells you how much you are paying for attention, but it is only the first step in a longer chain. A low CPC is not useful on its own if those clicks do not convert. What matters is the cost of the outcomes those clicks produce, such as a lead, a quote request, or a paid order.
Example for B2B on Shopify
B2B buyers rarely check out on the first visit. Someone might click a $3.50 ad, land on a product page, and submit a quote request instead of buying immediately. In that case your real question is cost per quote request and, further down, cost per accepted quote, not just CPC. If you capture quote requests as trackable events and follow them through to a paid Shopify order, you can tie ad spend to closed revenue rather than stopping at the click. See the B2B quoting glossary for related terms like cost per lead and conversion rate.