What is Pay Per Click?

Pay Per Click (or PPC as it is known) is an advertising term that describes online advertising payment models where advertisers pay per each click, as opposed to the CPM model (which is impression based).

Typically, advertisers create Pay Per Click ads on search engine platforms and use keywords to reach their target audience.

The main appeal of Pay Per Click campaigns is that users have to perform an action before the advertisers are charged, leading to ad creative optimization and sales funnel optimization to ensure that the click leads to acquisition or another meaningful action for advertisers.

CPC (cost per click) depends on the industry, and the Pay Per Click advertising market can be very competitive. Bids that advertisers set define how high up in the results page their ad will be placed, and they depend on industry standards.

Other things that affect the ad placement are the ad’s quality score (based on keyword relevance, CTR, and the landing page) and ad extensions (links, CTAs). The quality score and the Pay Per Click markets themselves are constantly changing, so Pay Per Click campaigns should be optimized constantly to achieve low CPC and high profitability of the ad campaign.

The formula for calculating Pay Per Click cost is ;

Pay Per Click= advertising cost / ads clicked