What is PPC (Pay Per Click) Advertising?

Pay-per-click (PPC) is an advertising technique used on websites, advertising networks, and search engines.

Advertisers bid on “keywords” that they believe their target market (people they think would be interested in their offer) would type in the search bar when they are looking for their type of product or service. For example, if an advertiser sells red widgets, he/she would bid on the keyword “red widgets”, hoping a user would type those words in the search bar, see their ad, click on it and buy. These ads are called “sponsored links” or “sponsored ads” and appear next to and sometimes above the natural or organic results on the page. The advertiser pays only when the user clicks on the ad.

While many companies exist in this space, Google AdWords and Yahoo! Search Marketing, which was formerly Overture, were the largest network operators at the end of 2006. However, in the spring of 2006, MSN launched their own in-house service which they called MSN adCenter.

Depending on the search engine, minimum prices per click start at $0.01 per click. These prices can reach up to $5 or more per click for services such as unsecured personal loans or mortgages. Very popular search terms can cost much more on popular engines.