What does the term 'Cost Per Click' (CPC) signify in ad campaigns?

The term 'Cost Per Click' (CPC) signifies the specific amount an advertiser pays each time a user clicks on their ad. This metric is crucial for evaluating the effectiveness of an advertising campaign, as it directly correlates costs to user engagement. When running a paid advertising strategy, CPC helps advertisers understand how much they are investing to drive traffic to their website or landing page.

When a business employs CPC as their bidding model, they are effectively focusing on paying for actual engagement rather than just exposure. This approach influences how advertisers optimize their ads and target their audience, as lower CPC can lead to higher return on investment (ROI) if it results in valuable actions taken by those visitors, such as purchases or sign-ups.

The other options do not accurately encompass the nature of CPC; allocating a total budget refers to overall campaign funding, impressions relate to how often the ad appears without necessarily leading to user action, and total revenue from ad clicks pertains to earnings, rather than costs associated with each click. Thus, option B precisely defines the essence of Cost Per Click.