What is a good cost per click (CPC)? The short answer: A good CPC is one that brings in more revenue than you spend to get that revenue. The larger the gap between what you spend and what you earn, the better it is for your business.
However, that gap is becoming harder to maintain. Average CPC rates are on the rise, making profitability more challenging. Wordstream reports that the average CPC increased by 10% in 2024 compared with the previous year. One key reason? Fewer people are using Google search. With fewer searches happening and more advertisers vying for attention, competition for clicks is fiercer than ever.
In this increasingly competitive landscape, determining a “good” CPC can feel like trying to hit a moving target. But don’t worry — we’ve got you covered. In this post, we’ll explore industry benchmarks to give you a clearer sense of what’s typical. We’ll also share strategies to help you optimize your Google Ads campaigns, lower your CPC, and ultimately improve your return on investment (ROI).
Cost per click refers to the amount advertisers pay each time someone clicks on their digital ad. While the concept originated with Google Ads, it’s now a standard feature across virtually every digital advertising platform.
CPC plays a significant role in shaping marketing performance. The higher the cost per click, the faster your ad budget is depleted — and the harder it becomes to achieve a strong ROI.
That said, CPC is just one piece of the puzzle. Savvy businesses evaluate CPC alongside other key metrics, including conversion rate, customer lifetime value (CLV), and total customer acquisition cost (CAC), to gain a fuller picture of overall campaign performance.
What qualifies as a “good” cost per click depends on several factors — most notably, your industry and the level of competition. In highly competitive industries, advertisers often drive up bids in the fight for visibility. Sectors with high-value products or services, like luxury goods, healthcare, and legal services, typically pay more per click because each potential customer is worth more.
Know that CPC rates vary by ad type. For example, display ads tend to have lower CPC than search ads. Wordstream notes that the average CPC for Google search ads across all industries is $2.69, while display ads average just $0.63 per click.
Here are some average CPC benchmarks for major industries as a benchmark:
Remember, these are only guidelines. The averages can change quickly depending on market dynamics. Individual businesses should continually track CPC averages to determine whether they are keeping pace with industry trends.
Now, let’s look at how Google Ads calculates cost per click. Google’s calculations focus on a combination of maximum bid, quality score, and ad rank.
Here is a real-world example: Imagine three mortgage lenders are competing for two ad spots on a Google search results page for “home mortgage lenders near me.” Each lender submits a maximum bid, and Google multiplies that bid by each ad’s quality score to calculate ad rank. The two lenders with the highest ad ranks secure the ad spots, with the top-ranked ad getting the most prominent position. The lender with the lowest ad rank misses out entirely.
There is a twist to all this, though: The highest bidder doesn’t always win. A well-targeted, highly relevant ad with a strong quality score can outrank a higher bidder with a weaker ad. That’s why optimizing relevance — from your ad copy to your landing page — can help you boost ad rank and lower CPC.
When it comes to bidding, you have two main options:
You can also use more complex, global-based bidding strategies like Target CPA or Target ROAS to optimize conversions. Target CPA sets a specific cost per acquisition for your campaign, while Target ROAS adjusts bids based on how much revenue you want to make from each ad dollar. If you are less concerned about conversions but want to drive as many clicks with your budget as possible, you can use Maximize Clicks bidding.
We’ve already touched on a few elements that can drive CPC up or down. Here is a quick summary of the main factors, along with practical tips to manage CPC more effectively.
As mentioned earlier, CPC varies widely by industry. High competition for popular keywords also pushes CPC up. One smart way to avoid costly bidding wars is to focus on long-tail keywords, which are more specific phrases that reflect niche searches.
Here’s an example: A travel agency promoting European vacations might find itself in a heated (and expensive) bidding war for a broad keyword like “travel Europe.” Bidding on a long-tail term, such as “best budget hotels in Paris,” could result in lower competition. It can also help to attract more qualified traffic from travelers who know exactly what they are searching for.
Google rewards ads that are relevant to the audiences they want to attract. Explicit, well-constructed ads with compelling copy are likely to garner a higher quality score and lower CPC in Google Ad bidding. But again, they must also be relevant.
If an auto dealer’s ad says, “2025 Toyota Corolla,” and a consumer searches for that exact phrase, the ad is 100% relevant and should command a high quality score. If the ad says, “Toyota Corolla,” it is 66% relevant to the search and thus produces a lower quality score.
You can also reduce CPC by hyper-targeting ads to your audience and using effective audience segmentation. Instead of casting a wide net and hoping to catch the right people, target your ads to more manageable subsets of the audience based on demographics, behaviors, or needs.
For example, research suggests that American consumers keep their cars for an average of eight years. An auto dealer using this data might target customers who purchased a vehicle from the dealership in the last seven years with a special trade-in discount offer to encourage an upgrade. This type of data-driven targeting not only helps control CPC but also improves the relevance and performance of your ads — a win-win for both budget and results.
Google allows advertisers to make advanced bid adjustments based on factors such as time of day, seasonality, and device type — all of which can influence CPC.
The landing page that your ad leads to also affects CPC and is a direct factor in Google’s calculation of quality score. The better the user experience your landing page offers, the higher the quality score and ad ranking you’ll likely receive. That results in lower CPC for most ads.
A poorly designed or ineffective landing page also results in a higher bounce rate, making any leads you generate from your ad effectively worthless.
Have you thought about how much your call-in customers could be influencing your CPC numbers? For businesses that rely on high-consideration purchases, phone calls often play a critical role in the sales process — and if you’re not tracking those conversions, you’re only seeing part of the picture.
Take Infinity Sales Group, for example. Ninety-eight percent of their sales come from inbound phone calls. By tracking conversions from those calls, they were able to optimize their media spend and make smarter bidding decisions.
Insignia used Invoca’s AI-driven call tracking and analytics software to deliver full multichannel attribution so marketers could see which campaigns were driving results. Ultimately, this reduced wasted ad spending by 80%, delivering both lower CPC and higher ROI.
We’ve examined the factors that can affect CPC. Here are six best practices for developing digital ad campaigns that keep CPC in check.
Investing time in keyword research is one of the smartest ways to attract the right customers — and control your CPC. The key is to understand your audience: What are they searching for? What language do they use when looking for solutions like yours? When you know your customers well, the right keywords naturally follow.
To avoid costly bidding wars, focus on long-tail keywords — highly specific search phrases that reflect clear intent. These longer phrases often face less competition and help your ad appear in more targeted, intent-driven searches. That means you’re paying less per click to reach people who are more likely to convert.
Relevance is everything when it comes to lowering CPC and boosting your quality score. To maximize relevance, make sure both your ad copy and the landing page you’re sending users to align closely with the keywords you’re targeting — and, more importantly, with what your audience actually wants.
Use your researched keywords naturally and strategically in your headlines, descriptions, and landing page content so Google sees the connection and rewards you with a higher quality score. And don’t forget to include a clear, compelling call to action (CTA) to guide users toward the next step, whether it’s requesting a demo, making a purchase, or calling your team.
Getting clicks starts with great ad copy. Start with a strong, benefit-focused headline — something that promises value right away, like “Save 20% Today” or “Find Your Perfect Mortgage in Minutes.”
Create ad copy that sets your business apart from the competition and assures the reader that your product or service can solve their problem. Remember, the goal isn’t just to get any click. You want to attract clicks from users genuinely interested in what you offer.
One often overlooked way to reduce CPC is to use negative keywords. Negative keywords eliminate irrelevant traffic and cut down on bad clicks on your ad, increasing the ratio of good clicks and reducing CPC.
For example, if you’re running ads for a luxury travel agency, you might add negative keywords like “budget,” “cheap,” or “hostel” to prevent your ads from appearing to users searching for low-cost travel options. This ensures your ad budget is spent on the right audience — those travelers who are genuinely interested in high-end experiences.
But don’t overdo it. If you use too many negative keywords, it could choke the response to your ad. See this guidance in Google Ads Help for tips on how to use negative keywords effectively.
We’ve outlined the various bidding strategies, including Target CPA and Target ROAS, that you can use in Google Ads. You should experiment to see which approach works best for you.
Most ad platforms, including Google Ads, let you compare your current strategy against other strategies using a control group and a test group. You run the same ad to both groups and, over time, compare results based on conversions, CPC, and overall ROAS. This process can help you optimize your bidding strategy and lower CPC.
You can use tools like Invoca to track and analyze the phone call conversions your ads drive. Your business might not get 98% of sales from inbound phone calls, like Insignia Group, but what if you get 48% of sales offline? That’s still a sizable chunk.
An AI-driven call tracking and analytics platform like Invoca has other benefits, too. You can use Invoca's call conversion data to inform and influence the Google bidding algorithm, driving more phone call conversions at a lower cost.
You can even use insights from phone conversations with customers to improve the retargeting of your digital ads. For example, if a group of customers call your dental office for more information on teeth whitening but don’t make an appointment, you can adapt or create an ad with a limited-time offer aimed at those customers to entice them to try that service.
Everyone is seeking an edge in business today. Most industries are hyper-competitive, and companies are often grappling with reduced consumer spending and shrinking marketing budgets. That’s why it’s vital to ensure you’re making every marketing dollar count. Optimizing your Google Ads and other digital campaigns to reduce CPC is essential to that aim.
Invoca delivers robust tools to help you achieve your marketing goals. Our AI-driven software tracks and analyzes every phone conversation to supplement the data you get from digital clicks and provide a complete attribution picture for marketing. With this insight, your business will be well-positioned to measure advertising performance, optimize campaigns, adjust bidding strategies, and design and drive more effective marketing strategies.
See how Invoca works in this short video:
To learn more about how Invoca’s AI-driven quality management tools can help you refine your CPC strategy and make the most of your marketing budget, check out these resources:
When you’re ready, book a free demo with our team to discover more ways Invoca can help your business improve its marketing ROI.
Cost per click (CPC) can vary significantly depending on factors like industry, competition, and ad platform. At its core, average CPC is simply the average amount a business pays for each click on its ad.
You calculate CPC by dividing the total cost of all clicks by the total number of clicks. For example, let’s say you run a Google Ads campaign that generates 100 clicks. Here’s how the costs would break down:
The total cost for this ad campaign would be $22. To find the average CPC, you would divide $22 by 100 clicks, resulting in an average CPC of $0.22.
There is no universal “good” CPC because CPC depends on several factors, including:
The best way to evaluate your CPC is to compare it against your target ROI. In other words, how much revenue do you expect to generate for every dollar you spend on ads?
For many businesses, a common rule of thumb is to aim for a 5:1 ROI — meaning every $1 spent on advertising should generate $5 in revenue. However, that ratio can shift depending on your industry, profit margins, and customer lifetime value (CLV).
