Money & metrics · also called cost per click, cost-per-click
CPC (cost per click)
CPC is the price paid for one click on an ad; in search arbitrage it is what the arbitrageur pays a traffic source for each visitor.
Cost per click is total ad spend divided by the number of clicks bought. It is the "buy" price in the arbitrage trade.
The word needs care, because a search arbitrage chain contains two different CPCs. The first is what the arbitrageur pays Meta, Taboola or another traffic source for a visitor. The second is what an advertiser pays the search engine when that visitor clicks a sponsored listing on the arbitrageur's page. The arbitrageur receives a share of the second and records it as RPC. The business works only when the revenue per bought click is higher than the cost per bought click.
On many platforms the buyer does not set CPC directly. Meta, for instance, charges per impression, and the effective CPC falls out of the CPM and the ad's CTR: a more clickable ad means cheaper clicks. Real cost per visitor is also slightly higher than reported CPC, because some paid clicks never load the page.
An example
Say you spend $200 and receive 1,000 clicks: CPC = $200 / 1,000 = $0.20. If the same ad cost a $10 CPM with a 5% CTR, 1,000 impressions give 50 clicks for $10, which is also $0.20.
Related terms
RPC (revenue per click)
RPC is the average revenue earned per monetised (paid ad) click: the "sell" price in search arbitrage. Convert it to revenue per visitor (RPV) before comparing it with CPC.
CPM (cost per mille)
CPM is the price of one thousand ad impressions; "mille" is Latin for thousand.
CTR (click-through rate)
CTR is the percentage of people who click something after seeing it, calculated as clicks divided by impressions.
The spread (margin)
The spread is the gap between what an arbitrageur earns from a visitor and what that visitor cost to buy.
Break-even point
The break-even point is where revenue exactly equals cost, so a campaign makes neither profit nor loss.
Maximum CPC bid
A maximum CPC bid is the most an advertiser is willing to pay for one click on its ad; the actual price charged is often lower.