What does Pay Per Click mean?
When an advertisement is displayed somewhere on the internet and the advertiser only pays when a user clicks on the advertisement, this is pay per click.
In other words the advertiser is paying nothing to show their advertisement, only is a user acts on it by clicking it.
The most well known Pay Per Click advertisements are those that can be seen on the right hand side of a Google page after carrying out a search. But other search engines such as Yahoo and Bing also offer similar services.
Pay Per Click can also be found in social networking sites such as Facebook.
How much advertisers pay can depend on the location of the advertisement on a webpage and the policy of the website.
With Google advertisements are triggered by a keyword that the advertiser chooses.
The advertiser will have stated how much he is prepared to pay for a click in advance. Then, when a user carries out a search on Google that contains that keyword, Google checks which advertiser is offering the most for a click and places them first (the top advertisement) and then so on in descending order.
This should not be confused with Cost Per Impression (CPI or CPM)
where the advertiser agrees to pay a certain amount for each time their advertisement is shown and pays nothing if someone clicks on it.