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Concept
Pay-per-click
Summary
Pay-per-click (PPC) is an internet advertising model used to drive traffic to websites, in which an advertiser pays a publisher (typically a search engine, website owner, or a network of websites) when the ad is clicked.
Pay-per-click is usually associated with first-tier search engines (such as Google Ads, Amazon Advertising, and Microsoft Advertising formerly Bing Ads). With search engines, advertisers typically bid on keyword phrases relevant to their target market and pay when ads (text-based search ads or shopping ads that are a combination of images and text) are clicked. In contrast, content sites commonly charge a fixed price per click rather than use a bidding system. PPC display advertisements, also known as banner ads, are shown on websites with related content that have agreed to show ads and are typically not pay-per-click advertising, but instead, usually charge on a cost per thousand impressions (CPM). Social networks such as Facebook, Instagram, LinkedIn, Reddit, Pinterest, TikTok, and Twitter have also adopted pay-per-click as one of their advertising models. The amount advertisers pay depends on the publisher and is usually driven by two major factors: the quality of the ad, and the maximum bid the advertiser is willing to pay per click measured against its competitors' bids. In general, the higher the quality of the ad, the lower the cost per click is charged, and vice versa.
However, websites can offer PPC ads. Websites that utilize PPC ads will display an advertisement when a query (keyword or phrase) matches an advertiser's keyword list that has been added in different ad groups, or when a content site displays relevant content. Such advertisements are called sponsored links or sponsored ads, and appear adjacent to, above, or beneath organic results on search engine results pages (SERP), or anywhere a web developer chooses on a content site.
The PPC advertising model is open to abuse through click fraud, although Google and others have implemented automated systems to guard against abusive clicks by competitors or corrupt web developers.
Official source
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