(Cost Per Click)
When web advertisements are priced not by the number of exposures, but rather by the number of clicks on the ad, the most common abbreviation is CPC, or "cost per click".
If CPC pricing is used, an ad could be shown a million times at no cost if nobody clicked on the ad. CPC pricing is often preferred by advertisers who feel that they can make their ad spend more cost effective by only paying for actual visits to their site.
CPC pricing may be particularly appropriate for situations where the advertiser is unsure of the audience and feels that paying for impressions (CPM advertising) would be too risky. CPC advertising is preferred by advertisers who feel they can maximize their ROI (return on investment) using it.
One concern when CPC pricing is used is the possibility of click fraud, which can increase the advertiser's costs with no additional revenue. See also Pay Per Click (PPC).
Calculations using CPC pricing are simple - if the quoted rate is $1.00, that is the amount that will be charged for each click, e.g., 100 clicks = $100. CPC rates can vary from a few cents at the low end to tens of dollars for very competitive keywords.
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