Pay-Per-Click Advertising

Pay Per Click Advertising, or PPC, is an online advertising payment model in which the payment is based on the number of “clicks” that are generated. PPC can also be called “cost per click.”

As an advertiser, here’s how it works. You bid for certain keywords that are related to the content of your site (the information or products that you offer). When a user searches with these keywords in a search engine, they are shown your listing, as well as others that are bidding on the same keywords. If the user clicks on your listing, you pay the amount that you have bid. The highest bidding advertisers will appear first in the search results, and the subsequent listings are ranked by the amount of their bid.

Bids for keywords can be anything from a few cents to a few dollars per click. Part of managing a PPC advertising campaign well is determining how much needs to be spent per click in order to get a good balance between visibility (your listing showing on the first page of the search results) and the advertising budget.

Starting in 1998, PPC Advertising became a larger part of the online advertising world. Overture (www.overture.com) and Google’s Adwords (http://adwords.google.com∞) are two of the most popular PPC systems. In these systems, ads appear near the search results under the heading “sponsored links.” PPC is advocated as an ideal short-term solution for driving traffic to a website, since the results can be seen within 24 hours of launching the campaign.

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