Pay Per Click definition

Pay-per-click is an online advertising models in which advertisers pay each time a user clicks on their advert, which typically takes the user to the advertiser’s website or a specially-designed landing page. The most used online PPC platform is Google Adwords, which brought in $42.5bn in revenue in 2012, although other search engines also use the PPC model to generate revenue.

Away from search engines, the PPC model is also used directly on websites, where the advertiser will pay the website owner each time the advert is clicked.

One of the most important metrics in PPC advertising is click-through rate, which is the total number of times an advert has been clicked divided by the number of times the advert has been shown (known as the number of impressions).

Click fraud, where competitors or malicious users repeatedly click a live PPC link, either manually or with specialist software, is often cited as a disadvantage of PPC advertising. Search engines are increasingly bringing in systems to identify and prevent click fraud but its efficacy is questioned.

Compare with Search Engine Optimisation and also see Cost Per Impression.

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