PPC – Pay Per Click Advertising

Pay per click advertising, also called PPC or Cost Per Click advertising, is a way of advertising on the internet.  This method is used to bring new viewers to a website, but it’s more than just a link.  A website owner agrees to host the ad, which often takes the form of an animated image, on their website, but they don’t do this for free.  Instead, the advertiser pays the website owner a small amount of money every time someone clicks on the ad.  Pay per click, then, is very literal: the site owner is paid per click.  This form of advertising is similar to pay per view, in which the site owner gets a small fee every time the ad is viewed, or pay per referral, in which the site owner gets a small percentage of any order a user makes on the advertiser’s website if they reached that website from the owner’s site.

The Affiliate Model

Pay per click advertising makes use of what’s called the affiliate model.  In this model, websites that display ads become an affiliate of the advertiser’s website.  The goal of the affiliate model is for businesses to create a network of blogs, personal websites, and other sites that all link to their website.  Ideally, the sites in this network are all high-traffic sites that feature content that would be relevant to those who would buy something from the advertiser.  Customers who regularly visit one of these affiliate sites will see the ad, click on it (providing the affiliate with a small amount of revenue), and then purchase something from the advertiser’s website (providing the advertiser with a larger amount of revenue).

The affiliate model is a pay-for-performance type of advertising.  If no one clicks on the ad, the affiliate does not get paid.  This type of model represents less danger to the advertiser than some other models because they’re only paying if they get traffic to their site.  The only risk the advertiser assumes is that someone will click through the ad but then not make a purchase on their website.

Dangers of Click Fraud

One of the biggest dangers of pay per click advertising is click fraud or click abuse.  This occurs when someone repeatedly clicks a link from an affiliate.  In some cases, this may be the affiliate owner or those who work for the affiliate owner.  The more clicks on the ad, the more that affiliate gets paid, and some do try to illegally manipulate the numbers.  Some businesses also perpetuate click fraud against their competitors to make them spend more money on advertising.  Many websites, including Google, have created systems to protect against this abuse.