Cost-per-click (CPC) is bullsh*t.

Tate Freundlich | Associate Media Director

I don’t mean your CPC is too high. I mean the way it is commonly reported on is bullshit.

So is CPM. So is Impression Share. So is Win Rate. And while we're at it, any metric that starts with "cost per" deserves serious scrutiny.

Before you come for me with pitchforks for slandering the sacred names of the metrics that adorn dashboards and QBR decks, let me clarify: these numbers aren't inherently meaningless. But reported in a vacuum, without understanding what that click is actually worth in the context of your brand and campaign goals, tells an incomplete story at best, and a dangerously misleading one at worst.

This was inspired by a real conversation I had with a brand that shared a reporting deck with a summary that read something like: "This is what success looks like. Our CPC declined from $4.26 to $2.35, and our ads are performing so well on Meta that we're only paying a $9 CPM, down from $25." Another slide proudly noted that Search Impression Share had climbed to 88%.

My gut reaction? That’s bullshit.

That wasn't competitive posturing. The reason we were looking at that deck in the first place was:

• Sales were flat while spend was up.

• Traffic looked healthy, but none of it was converting.

• Foot traffic across all locations was either flat or down year over year.

Yet their agency partner kept delivering good news — green arrows, charts trending in the right direction, and a confident narrative.

The numbers were moving. The business wasn't. That's a sign that nobody is measuring what actually matters.

The Winner’s Curse

If your agency or marketing team is chasing green arrows and leading with horse-race metrics like CPC fluctuations without clearly articulating what those numbers mean for your business, you're likely suffering from what's known as The Winner's Curse.

It's a phenomenon that occurs in competitive auctions, like digital advertising, where the "winner" is actually the loser because they overpaid. Think back to the last conversation you had about CPCs. You'll probably recognize what causes it: a troublesome mix of incomplete information (nobody knows the true value of the item, so everyone guesses) and the emotion of competition (the heat of the moment, the desire to win, and anchoring bias overriding sound investment logic).

Before you know it, you're celebrating a 5% CPC decline or grilling your media team over a $9 click while the real question goes completely unasked: Why is that, and does it actually matter?

Is a $9 CPC genuinely a great deal for your business? Or does a declining CPC signal that your market share for that click is shrinking? Could optimizing toward a lower "cost per" mean you're actually walking away from clicks that drive real bottom-line value? And are the industry benchmarks you're measuring against even remotely relevant to your business model?

If your brand caters to a higher value sale like luxury goods or experiences, you deploy ads that serve multiple business objectives, or are pursuing serious growth, I urge you to pay special caution to this pattern.

So what do you do?

Since we navigate this every day, and we know that your business economics won't always fit the benchmark mold, we have some tools to help you cut through the noise. 

1. Calculate assumed results and derive assumed values. We've built an Excel table with a video walkthrough to help you do exactly that. Watch it here.

2. Use Google's Conversion Value Calculator for each important action your marketing supports, and assign a real, defensible value to it. To watch a walkthrough of how to use this tool, click here.

Then ask yourself: Is that value working in my favor? Am I over-investing in something that returns nothing tangible? 

Call bullshit. Make adjustments. And, if you need a friend to help you make these calls, call us. 

Don’t fall for the Winner’s Curse. CPC, and any "cost per" metric, is only worth tracking if you've done the work to understand the value behind the cost and what it actually means for your business. Without that context, you're celebrating the wrong numbers.

The good news is, if you use these two resources to help you frame your marketing in a more effective way, you’re statistically better off than your competitors. Trust us, we’ve seen it. And if your finished chasing vanity metrics, we would love to talk.