What is the concept of cost-per-click (CPC)?

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Cost-per-click (CPC) is a key metric in digital advertising that measures the amount an advertiser pays each time a user clicks on their ad. This model is particularly prevalent in paid search campaigns and online advertising, where the goal is to drive traffic to a website or landing page through clicks generated from the advertisement.

CPC is a performance-based pricing model, meaning that advertisers are charged only when a user demonstrates interest by clicking on their ad, rather than paying for ad visibility or impressions. This model incentivizes advertisers to create compelling ads that encourage user engagement, as their spending directly correlates with user action.

Understanding CPC is crucial for maximizing the efficiency of advertising budgets. Advertisers can calculate their return on investment (ROI) effectively by monitoring the number of clicks generated relative to the overall expense incurred.

While the other choices illustrate related concepts in the realm of digital advertising—like the overall cost of a campaign, average costs of clicks, and costs associated with ad impressions—they do not define CPC as accurately as the correct answer does.

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