Pay Per Click is also called cost per click. It is a model for internet advertising with the purpose of directing traffic to a certain website. The advertisers pay the website’s publisher whenever someone clicks on the ad. So, the cost per click is very simply the amount of money spent to have someone click on an advertisement.
Search Engines
Search engines have changed the landscape of advertising on the internet somewhat. In the past, the search engines were not nearly as efficient. But now, keywords and phrases can drastically increase the number of visitors to a certain website. Because of this, advertisers bid on phrases relevant to their desired market. Some other sites will use fix prices instead of bidding systems.
Affiliates
The affiliate model of PPC allows purchasers to buy advertisements wherever people are on the internet. The model offers monetary incentives for affiliating with various sites. This incentive is usually a percentage of the advertising revenue. The affiliated websites pay merchants when users click through to the advertised site. Because this model involves paying only when someone clicks, it does not cost the merchant anything. These are desirable because of the relatively low risk.
Sponsored Links
PPC ads work by appearing when a keyword search matches the advertiser’s list of keywords. They also display when a website displays content relevant to the advertiser’s keywords. For example, if an advertiser had paid for “widget” as a keyword, their ad for widgets would appear whenever someone searched for widgets. In this way, the system is incredibly simple. The advertisements that appear are called sponsored ads or sponsored links. They are typically banners that appear at the top and bottom of pages as well as on the side.
Fraud
Fraud is a distinct possibility. Click fraud is the black hat technique of designing an automated system that imitates a legitimate user. The bot clicks on an ad repeatedly to simulate interest and create revenue. Some employers might just employ an actual human to click repeatedly on a link. This illegitimate technique is somewhat counteracted by automated systems in place by many search engines. They detect repeated clicks and disqualify the advertisement.
Flat Rate
PPC is divided into two different structures, flat rate, and bid-based. In a flat rate model, the publisher and the advertiser set a fixed dollar amount that will be awarded per click. This is the simplest model. The prices are often variable based on the perceived value of different web pages.
Bid Based
The other system is bid based. The bidding model involves advertisers bidding over the price paid per click. This price is dependent on the value of different web pages as well as the rate advertisers are willing to pay.
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