Cost per click (CPC) is the average price you pay for one click on an ad, calculated as spend divided by clicks. It is the metric, distinct from Target CPC, which is a bid strategy that aims for an average CPC.
The metric, not the bid strategy
Average CPC is simply spend ÷ clicks. Do not confuse it with Target CPC, which is a manual bidding approach that tries 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.