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Pay Per Click (PPC) is an online advertising model that pays the advertiser publisher for every “click” on the ad link.  Alternatively, PPC is known as the cost-per-click (CPC) model. The pay-per-click model is mainly offered through search engines (such as Google) and social networks (such as Facebook).  Google ads, Facebook ads, and Twitter ads are the most popular platforms for PPC ads.

How the PPC model works

The pay per click model is basically based on keywords. In search engines, for example, online ads (also known as sponsored links) appear only when someone searches for keywords related to the product or service being advertised.  Profit bidding that rely on pay-per-click advertising models research and analyze the keywords that are most relevant to their products or services.  Investing in relevant keywords can lead to more clicks and ultimately higher returns.

The PPC model is considered beneficial for both advertisers and publishers. For advertisers, the model is useful because it provides an opportunity to advertise products or services to a specific audience who are actively searching for relevant content. In addition, a well-designed PPC advertising campaign allows the advertiser to save a considerable amount of money because the cost per visit (click) of a potential customer is higher than the cost per click paid to the publisher.

Pay per click model

Typically, pay-per-click advertising rates are determined by a flat rate model or a bid-based model.

  1. Flat rate model In the flat rate pay per click model, an advertiser pays a fixed fee to the publisher for each click. Publishers usually list different PPC rates that apply to different areas of their website.  Note that

publishers are generally willing to negotiate pricing. If an advertiser offers a long-term or high-priced contract, the publisher’s fixed price is likely to be reduced.

 2. Bid-based model

In the bidding model, each advertiser bids with the maximum amount they are willing to pay for the ad space. Then, a publisher conducts an auction using automated tools. Auctions are held whenever a visitor activates the ad space.

Additional resources

CFI is the official provider of the Global Financial Modeling and Valuation Analyst (FMVA) ® Certification Program, designed to help anyone become a world-class financial analyst. To further your career, the following additional CFI resources will be useful:

   *Bait and switch

   *Click and mortar

   *Customer Acquisition Cost (CAC)

  * Introduction to e-commerce

PPC advertising campaigns can accomplish much by focusing on you:

1-Keyword relevance – create relevant PPC keyword lists, hard keyword groups, and appropriate ad text.

2-Landing Page Quality – Create the best landing pages with specific search queries, relevant content and clear call to action.

3-Quality Score – Quality Score is a Google ranking of the quality and relevance of your keywords, landing pages, and PPC campaigns. Advertisers with better quality scores get more ad clicks at a lower cost.

4-Creative – Attractive copy of the ad is important;  And if you’re advertising on the Display Network, you can use tools like our free Smart Editor to create designer quality ads that will require clicks.


PPC may seem complicated and expensive, but the more you do it, the easier and cheaper it becomes.  By using a combination of search and display ads, choosing the right keywords, and improving your ad rank, you can get a lot of traffic to your website.

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