Cost per click is a term used in online marketing. Cost per click means that you pay for each visitor who clicks on your online advertisement. As advertiser, you pay for each visitor who clicks through to your website via the advertisement. To prevent the costs per click from becoming too high, you can set a maximum. You indicate how much you are prepared to pay for a click.
The prices for certain advertisements vary widely. For example, the cost per click for keywords depends on the search volume in Google. The more often a keyword is searched for, the more expensive it is to use that word to advertise via an anchor text, for example. The quality score also influences the cost per click.
The trick is to strive for an advertisement or keyword with which you reach the right target group, generate as many clicks as possible, at the lowest cost per click. With the aid of the Keyword Effectiveness Index, you can determine which keywords are interesting for you.
Other formulas for measuring the effectiveness of an online advertisement include the click through ratio, click to conversion time and click through rate.