The cost-per-click (CPC) is the amount you earn each time a user clicks on your ad.
It is often used when advertisers have a set daily budget.
When the advertiser's budget is hit, the ad is removed from the rotation for the remainder of the period.
How Is Cost Per Click Calculated?
The actual formula for cost per click in AdWords is:
The Importance of Cost Per Click in Search Advertising
Cost-per click is important because it is the number that is going to determine the financial success of your paid search campaigns. Your return on investment, whether you're over- or underpaying
for each action, will be determined by how
much you are paying for clicks, and by what kind of quality you are getting for that investment.
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