Cost Per Click (CPC) is the average price an advertiser pays each time a user clicks on one of their digital ads. Because most advertising platforms (Google, Meta, LinkedIn) operate on an auction-based system, CPC is determined by competition, ad quality, and the 'bid' amount. CPC is a direct measure of the cost of 'Traffic Acquisition.' To calculate it, you divide the total spend on a campaign by the number of clicks received. CPC is a critical input for calculating the overall CAC and the ROI of a marketing channel. A rising CPC often indicates that a market is becoming more competitive or that your ads are losing relevance, while a falling CPC suggests you have found an underserved audience or optimized your creative performance. High-growth businesses aim to keep CPC low while maintaining high traffic quality, ensuring that the users clicking through are actually likely to convert into paying customers later in the journey.