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What is Pay Per Click Advertising?

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  • Written By: Tricia Ellis-Christensen
  • Edited By: O. Wallace
  • Last Modified Date: 04 November 2016
  • Copyright Protected:
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    Conjecture Corporation
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Pay per click advertising (PPC) is a widely used form of paying for advertisements on the Internet. This method of charging advertisers for clicked links is usually credited to Bill Gross, who founded Idealab and Goto.com. The idea of pay per click advertising was first introduced in 1998.

The basic premise of PPC advertising is that people who purchase links on search engines or on sites that employ search engine ads, like blogs, only pay for their ads when a customer clicks on the advertisement link. Fees vary considerably. Search engine terms or keywords that are used frequently cost much more on a per click basis than do ones that are searched infrequently.

Many people may be familiar with pay per click advertising as offered by search engines like Google. Most other search engines have some form of this marketing strategy for commercial clients. Many search websites have two separate ways in which your ads can be featured. In sponsored match pay per click advertising, ads show up on search engine pages. When people search for a term, if your ad is related, it may pop up, often to the side of search engine results.

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The other form of pay per click advertising is called content match. When people create private content driven websites, they can choose to participate in programs that allow ads to run on their pages. They usually are reimbursed on a pay per click basis too, though they only make a percentage of the total the advertiser pays. Search engines look for ads that will match content on private sites, so that people interested in the content would also be the most likely customers for any ads shown.

A few companies offer variations on the pay per click advertising format. For instance a private website can set up links to things like Amazon books or products. If someone clicks on these links and actually purchases the book or product advertised, the website owner may receive a percentage of the sale. This is called pay per action. Google briefly tried a pay per action model in the late 2000s but abandoned the program in 2008.

If you’re interested in pay per click advertising for your website you’ll find varied programs on most major search engines. It’s important to note that your site may not be among the first sites shown when a person uses a search engine to look for something. Many search engines rank pages and will still choose what they consider the best pages in their sponsored results. Though pay per click advertising may not cost you anything if no one is clicking on your ad, it also doesn’t bring you business if no one visits your site.

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