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What is Pay-per-Click?

The term Pay-per-Click, PPC for short, means payment per click and represents a billing model in online marketing. Here, the advertising company does not pay for a mere insertion of its advertisement, but only after a user has clicked on the advertisement and been redirected to a target page. In this way, it can be seen whether there is also interest in the product. PPC is widely used in search engine advertising and affiliate marketing

  • Payment is only made when users are aware of the advertisement
  • Enables complete cost control
  • Increases product reach and reduces wastage

Where is the Pay per Click method applied?

The Pay per Click method of payment is primarily used in online marketing. It is billed per click on the advertising medium such as banners or text ads. The advertising company therefore does not pay for the pure insertion (ad impression) of its placed advertising, but only if a click by the user has actually taken place. There are different types of pay-per-click advertising media. These can be placed in the form of various ads on the search result pages of Google & Co. In addition, a display banner or a text link can be placed on a portal or blog (affiliate marketing). Other common billing models are pay-per-lead and pay-per-sale.

How does the Pay-per-Click method work

In search engine marketing the pay-per-click method of payment works like this: The search engine offers advertising spaces, which are marked as ads. Such advertising spaces can then be booked by advertising companies. However, because there is usually only limited advertising space available, the principle of the highest bidder has been introduced. The more the advertiser wants to pay for a user click, the more advantageously his advertisement is positioned in the search result display. The user enters something into the search input field of the search engine and is presented with a display of results matching his keyword. This contains organic search results, but also commercial ads (like Google AdWords). In this way, the user receives target group-specific advertising, the so-called ad impressions. However, the advertising company does not have to pay anything for the pure ad impressions themselves. The costs are only due for one click (hence the term pay per click). In this way, a user is reached exactly when he or she shows real interest in the offer. Whether or not this customer actually buys in the end is irrelevant for the PPC model. The only thing that counts here is that the user has reached the advertisers site via the corresponding advertising medium. In affiliate marketing, the pay-per-click model works similarly. Publishers or affiliates offer advertising space on their portal, blog or other site. The merchants or advertisers can then book such advertising space in the form of text links or banners. As users browse the web, they arrive at the publishers website and are shown the advertising. When such an advertisement is displayed, users may click on it. For a final click, the merchant pays an agreed commission to the participating affiliate via pay-per-click. A big advantage is: You reach a target group that is affine for the product or service. In contrast to the pay-per-sale procedure, an agreed commission is paid to the publisher if the link is only clicked on and does not force a purchase to take place. The click prices are correspondingly low. It also happens that the merchants impose certain payout limits on the remuneration. This means, for example, that only x clicks should take place before the publisher is paid out his money. With the Pay per Click method, however, good money can still be earned in affiliate marketing without much effort. However, the prices per click vary considerably in individual cases – from a few cents to several euros. More strongly advertised topics also achieve higher click prices than unknown niche topics

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