Pay per click advertising is offered through Google as well as a number of other online platforms. It functions by triggering ads based on keyword searches or a user’s interests. When a user searches for a topic related to what they’re selling, their ad may pop up and the user could click on it.
Pay per click advertising rates are most often determined using one of two models.
- Flat-rate Model: an advertiser pays the same fee for every click their advertisement receives
- Bid-based Model: each advertiser bids with the amount of money they’re willing to pay for a spot and an auction is run when a visitor triggers the ad spot. The winner is determined not only by the amount of money they bid, but also on how relevant their content is.
Using a pay per click model is mutually beneficial to the advertiser and the host. The host, whether it be Google or another platform, gains revenue from the campaign, while advertisers ensure their ads get seen and only pay when someone interacts (clicks) on the advertisement.
