Pay-per-click (PPC) is an internet advertising model used to drive traffic to websites, in which an advertiser pays a publisher (typically a search engine, website owner, or a network of websites) when the ad is clicked.
Pay-per-click is commonly associated with first-tier search engines (such as Google Ads, Amazon Advertising, and Microsoft Advertising formerly Bing Ads). With search engines, advertisers typically bid on keyword phrases relevant to their target market and pay when ads (text-based search ads or shopping ads that are a combination of images and text) are clicked. In contrast, content sites commonly charge a fixed price per click rather than use a bidding system.
PPC display advertisements, also known as banner ads, are shown on web sites with related content that have agreed to show ads and are typically not pay-per-click advertising, but instead usually charge on a cost per thousand impressions (CPM). Social networks such as Facebook, Instagram, LinkedIn, Reddit, Pinterest, TikTok, and Twitter have also adopted pay-per-click as one of their advertising models. The amount advertisers pay depends on the publisher and is usually driven by two major factors: quality of the ad, and the maximum bid the advertiser is willing to pay per click measured against its competitors’ bids. In general, the higher the quality of the ad, the lower the cost per click is charged and vice versa.