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Make money with PPC Advertising
The cost per click (CPC) is the amount paid by an advertiser to a search engine or a site editor for bringing a visitor to click the link from an advertisement (text, image, video, etc) to the site of advertiser.
Pay per click is an advertising model used by websites, where advertisers pay the web host advertising only when someone clicks on them. For search engines, advertisers typically are bidding on keywords related to their target, or business. For content sites, the price per click is generally fixed and does not use an auction system.
On the Web page after Google AdSense (CPC point of view of the Editor):
The cost per click (CPC) is the amount paid by an advertiser each time someone clicks on their ad. For each ad, the CPC is determined by the advertiser. Some advertisers may choose to pay more per click than others, depending on the products or services they are advertising.
On the Web page after Google AdWords (CPC point of view of the Advertiser):
This is the amount you'll actually pay for each click on your ad. The AdWords Discounter automatically calculates the lowest fare to maintain the positioning of your ad. Your actual CPC will be equal to or less than the CPC bid you specify for your ad group, your keyword or location.
The Cost Per Click is a model of payment to performance: the web site generates more clicks from visitors on advertising and the editor of the website is paid. It is a model that shares the risk between the advertiser and the producer and that is why this model is so popular.
The Cost Per Click is a balanced system: basically, the logic is: "I pay you if your visitors click my advertisement (so if your visitors match my target), regardless of their action then, because what is going after the click is the responsibility of the advertiser, not the editor."
Cost per click was not invented by Google, but it is clear that Google has popularized heavily with Google AdSense and Google AdWords, which for some has become synonymous with "Advertising on the Internet (some sites derive almost all of their revenue from Google's services). What Google brings most is the auction system (which we will see below), and contextual placement, ie. targeted advertising based on content of the website on which it appears. These two innovations have allowed the most relevant sites to gain a lot of advertising per click.
The two main pay per click models are:
- The fixed CPC: The most common model: the advertiser and the publisher agree on a price ADVANCE per click. In general the editor presents its advertising rates based on location and the popularity of pages, then the advertiser negotiated depending on the number of placements, the duration of the campaign, etc.
Example: If the editor asks for a CPC of 1.00 Euro, this means that the advertiser will pay 1 Euro per clicks on his banner or text link. If the advertiser buys 1000 clicks, the campaign will stop after 1000 clicks have been made by visitors to the website. The total cost of the campaign will be 1000 Euros.
- The PPC bidding system with: This is the particular model used by big search engines like Google AdWords, Yahoo Search Marketing and Microsoft adCenter. The advertiser signs an agreement allowing it to compete with other advertisers in an auction system by the private ORGANIZED publisher, or more often by a third party platform such as those mentioned above. Each advertiser decides the maximum price he is willing to pay for a specific location (usually it is the purchase of keywords) and inform the organizer of the auction. An online system automatically defines each user request of what is the best offer and brings up advertising that matches.
In the case of the PPC with the auction system, the CPC depends on the availability of competition. The advertiser does not know the price he will pay for a click, but only the maximum price he may pay for a click.
Click fraud
Click fraud is the main disadvantage of pay per click model: it is false clicks, ie. clicks realized by ill-intentioned people, for the sole purpose of earning money. If the country has cheap labor, for example, it is easy to pay some people to click on banners and get paid for those clicks.
Click fraud has almost caused the collapse of pay per click model, but fortunately agencies and platforms have developed powerful tools that analyze anti-fraud including the origin of clicks, the frequency, etc. to detect any abnormality.
Payment per click is a very good model for advertisers who want to have visitors or acquire new members, and not sell a product, service or subscription.
About the Author
Daniel is an SEO content writer you can view more of his works at SEO and he enjoys his time developing forex trading systems and writing tutorials and articles about Forex and many other niches.
