Pay per click (PPC) is an Internet advertising model used on websites, where advertisers pay their host only when their ad is clicked. With the different search engines, advertisers typically bid on keyword phrases relevant to their target market. Whereas, content sites commonly charge a fixed price per click rather than use a bidding system.
Cost per click (CPC) is the sum paid by an advertiser to search engines and other Internet publishers for a single click on their advertisement, which directs one visitor to the advertiser's website.
In contrast to generalized portal that seeks to drive a high volume of traffic to one site, PPC implements the so-called affiliate model that provides the purchase opportunities wherever people may surf. It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites. The affiliates provide purchase-point click-through to the merchant. It is a pay-for-performance model: If an affiliate does not generate sales, it represents no cost to the merchant. Variations include banner exchange, pay-per-click, and revenue sharing programs.
Websites that utilize PPC ads will display an advertisement when a keyword query matches an advertiser's keyword list, or when a content site displays relevant content. Such advertisements are called sponsored links or sponsored ads, and appear adjacent to or above organic results on search engine results pages, or anywhere a web developer chooses on a content site.
Among PPC providers, Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter are the three largest network operators, and all of them operate under a bid-based model. Cost per click (CPC) varies depending on the search engine and the level of competition for a particular keyword.
The PPC advertising model is open to abuse through click fraud, although Google and others have implemented automated systems to guard against any abusive clicks by competitors or corrupt web developers.