The metric, not the bid strategy
Average CPC is simply spend ÷ clicks. Do not confuse it with Target CPC, an automated bid strategy that sets bids to hold your average click cost near a number you set. CPC the metric just reports what happened.
Why CPC alone misleads
A cheap click is not a cheap customer. Broad match and loose targeting can drive CPC down while filling the funnel with traffic that never converts, which is why we trace clicks through to cost per lead and CAC. On Search, CPC is a function of your Ad Rank and the competition, not a fixed rate.
Common questions
How is CPC calculated?
Divide total spend by the number of clicks. $400 of spend producing 200 clicks is a $2 average CPC.
What is the difference between CPC and Target CPC?
CPC is the metric, what a click actually cost on average. Target CPC is a bidding strategy that aims to keep your average CPC near a value you set; it is not a hard cap on any single click.