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Pay Per Click (PPC) Advertising

Pay Per Click (PPC) Advertising

Pay per click (PPC) (also called cost per click) is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher (typically a website owner) when the ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market. Content sites commonly charge a fixed price per click rather than use a bidding system. PPC "display" advertisements are shown on web sites or search engine results with related content that have agreed to show ads. This approach differs from the "pay per impression" methods used in television and newspaper advertising.

In contrast to the generalized portal, which seeks to drive a high volume of traffic to one site, PPC implements the so-called affiliate model, that provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites. The affiliates provide purchase-point click-through to the merchant. It is a pay-for-performance model: If an affiliate does not generate sales, it represents no cost to the merchant. Variations include banner exchange, pay-per-click, and revenue sharing programs.

Websites that utilize PPC ads will display an advertisement when a keyword query matches an advertiser's keyword list, 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, or anywhere a web developer chooses on a content site.

Among PPC providers, Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter used to be the three largest network operators, and all three operate under a bid-based model. On December 4, 2009, Yahoo and Microsoft signed a deal to join forces in the search space. In 2010, Yahoo and Microsoft launched their combined effort against Google and Microsoft's Bing began to be the search engine that Yahoo used to provide its search results. Since they joined forces, their PPC platform was renamed AdCenter. Their combined network of third party sites that allow AdCenter ads to populate banner and text ads on their site is called BingAds.

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