Cost-per-click (CPC) is the amount an advertiser pays for one click on a paid ad. It is set by auction, so the price moves with competition rather than being fixed.
CPC is the unit price of paid search, and it sits between your budget and your results. Budget divided by CPC is roughly how many visitors you can buy. CPC divided by your conversion rate is what each enquiry costs. Get CPC wrong and every number downstream is wrong with it.
Two CPC figures are worth keeping separate. Your maximum CPC is the ceiling you set, the most you will pay for a click. Your actual CPC is what you are really charged, and it is almost always lower, because Google only charges enough to beat the advertiser ranked directly below you. Average CPC, the number on most dashboards, is just actual CPC totalled and divided across clicks. A campaign with a $6 maximum bid routinely pays $3. Most accounts no longer set that maximum by hand: Smart Bidding, Google's automated strategy, sets a bid for each auction based on how likely the click is to convert, so the lever shifts from picking a number to feeding Google an accurate conversion goal.
What good looks like depends entirely on the industry, there is no universal target. In Australia the average Google search click runs roughly $2 to $4 AUD, but the spread is wide. Trades and home services sit near the low end. Finance, insurance and legal sit at the top, where a single click can cost more than a tradie pays for a week of them. A Melbourne mortgage broker bidding on "refinance home loan" is buying clicks in one of the most expensive categories in the country, so for that broker a healthy CPC is double-digit and still profitable, because one settled loan covers hundreds of clicks.
That is the trap in chasing a low CPC. A cheap click that never converts costs more than an expensive one that books a job. The number that actually governs a campaign is cost per conversion, sometimes called cost per acquisition, and CPC is only an input to it. A rising CPC is fine if conversions rise with it, and a falling CPC means nothing if the traffic is the wrong traffic.
The honest lever for bringing CPC down is relevance, not bid-cutting. Google rewards ads and landing pages that match the search with a lower price for the same position, the mechanism reported by Quality Score. CPC is one number inside the wider economics of PPC, and the full picture of paid cost against organic cost sits in Google Ads vs SEO.
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