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Refers to the cost of acquiring a user who conducts a transaction such as a sale or registrations. It is the total cost of the campaign to bring visitors to the site divided by the number of transactions achieved through the campaign; the cost per click divided by the conversion factor.
Advertising on search engines now works by charging you a fixed amount every time a user clicks on a "sponsored link" or pay-per-click ad. The price of each click depends on the popularity of the keyword associated with the ad. The total cost of the campaign is the number of clicks times the cost-per-click or CPC.
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