Glossary of Mobile Advertising Terms
CPC (Cost Per Click) is the cost the advertiser pays for each click on their ads. For advertisers that have a set daily budget, this method is used quite frequently.
The core of CPC is simple. Advertisers set the maximum CPC (the maximum amount they are willing to pay) and everytime someone clicks on their ad they’re charged with a certain amount. The amount will vary depending on several things, like advertisers maximum CPC or their competitor’s bid. You can sometimes pay much less than your max CPC.
CPC is calculated by dividing the advertiser's campaign cost with the number of clicks. This isn’t as simple as it sounds because different platforms (for example AdWords) have different methods of calculating conversions.
All in all, CPC is a very important metric because you’ll have problems to achieve your desired ROI (return on investment) if CPC gets too high, which is quite possible since things can add up really fast (clicks, cost, etc.). It will all depend on the quality of the traffic you get from those paid clicks and of course the amount you pay for those clicks. Having any kind of traffic isn’t necessarily a good thing, because you’ll want a traffic that has a relevant impact on your business. CPC is sometimes also known as PPC (Pay Per Click).