Cost per Click

When ads were sold purely by the number of times they appeared, all the risk sat on the advertiser. A hundred thousand impressions with nobody clicking still produced the full invoice.

Pagedeck's first campaign worked out that way. Ravi bought 100,000 impressions for $460 on an impression basis and the ad was clicked a little over 700 times. The platform's report confirmed the impressions had been delivered in full, which was the contract, so there was nothing to dispute. Paying by clicks earns its place here. Impressions that merely appear cost nothing, which splits the risk between the platform and the advertiser.

Divide the money spent by the number of clicks. Spend $600 and get 1,000 clicks and the cost per click is $0.60.

1. Agree on what counts as a click first. Whether the same person clicking three times counts once or three times differs by platform. That's usually why your own visit logs and the platform's click count never match.
2. This is an outcome, not a setting. Each placement runs an auction where your bid and the performance of the creative together decide position. Change the creative and the price drops on the same budget.
3. It connects to the impression basis. At a cost per mille (CPM) of $4.60, a thousand impressions cost $4.60; if 7.5 of those thousand clicked, each click cost $0.60. Double the click-through rate and the same placement costs half as much per click.
4. Driving the click price down isn't the goal. Spend $600 to bring in 1,000 people, sign up 30 of them, and each signup cost $20. Get the click price to $0.30 while signups fall to 10, and the cost per signup rises to $30.
5. So reports carry both numbers side by side: cost per click and cost per conversion. The second one has its own name, cost per action (CPA). Read the first as the price of arrival and the second as the price of someone who stays.

"Click price went from $0.60 to $0.90 and signups are flat."

Arrivals cost more and the outcome didn't move, so efficiency fell.

"This placement doesn't offer a click basis, so impressions are the only option."

The platform decides which bases are available, so it isn't always a choice.

"New creative lifted the click-through rate and the price came down with it."

Creative that performs wins the auction more cheaply on the same budget.

When Ravi reworked the quarterly report, a cost-per-signup column went in beside the cost-per-click column. After that, nobody argued that the cheapest channel was the best one: the channel buying clicks most cheaply at $0.40 turned out to have the most expensive signups at $45 each.