Pay-per-click (PPC) is an advertising model that allows advertisers to pay a certain amount of money each time their ad links are clicked on by a user. This model is meant to make sure that users get information they specifically want and not just any old content. It also allows advertisers to target ads directly to relevant audiences.
How the PPC Model Works
Pay-per-click (PPC) advertising is a cost-effective marketing on the web. The main advantage is that it can show its adverts to all people that search the keywords related to your product or service, even if they have never visited your website before. With pay-per-click you have to pay only one time for a whole year and then you don’t need to spend additional money on advertisement.
PPC advertising is an advantageous model for both advertisers and publishers. For advertisers, the model provides the chance to release products or services to specific users who are searching for interconnected content. In addition, a well-designed PPC campaign allows an advertiser to save a substantial amount of funds as each visit (click) from a possible client exceeds the cost of the click paid to a publisher.
The pay-per-click model works in two ways; it generates revenue both from clicks and from traffic. These two different sources of advertisement are usually used to balance out each other. For example, if you want to ensure that there is more revenue coming from your PPC ads then you should include more free searches and social networking activities in order to drive a large amount of traffic towards your website. If at the same time the number of clicks on those activities are higher then this would increase the earnings even further.
Flat-rate model: The flat-rate model is a PPC method in which advertisers pay publishers for each ad shown. The advertiser pays a fixed amount per click or impression and the publisher keeps most of the revenue from these impressions.
Bid-based model: Bid-based model involves the method of targeting to advertising spots by advertisers and publishers, who enter bids with maximum prices they are willing to pay. The concept behind this model is to provide transparent pricing and fair compensation to publishers and advertisers violating some advertising laws.
Note that the winner of an auction is generally determined by the rank, not the full quantity, of money offered. The rank considers both the quantity of money offered and the quality of the content offered by an advertiser. So, the bearing of the content is as important as the offer.