Pay-per-click (PPC) means "pay per click". It is an advertising model for the internet in which a company does not have to pay for displaying the ad, but for users clicking on it.
PPC is mostly used on search engines such as Google or social networks such as Facebook which sell their advertising space to companies. These advertising spaces can be banners or text ads, for example. If users decide to follow the ad, the advertiser incurs costs - but not before.
The most important advantage of this advertising model is, of course, that you only have to pay money if your ad is successful. You do not pay for the display of the advertisement, but for the fact that it has addressed someone.
For you as a company, this means that the scatter loss can be significantly reduced. Scatter loss occurs when an ad is displayed to users who are not aware of it. You can also set a budget in advance that you would like to use for your advertising campaign.
This allows advertisements to be placed on well-known search engines with small amounts of money. This makes PPC particularly interesting for small companies that only have a small budget but still want to increase their reach.
In addition, the pay-per-click model is perfect for short-term activities such as sales or current press releases.
The advertising can be activated within a few minutes and is then immediately visible on the Internet.
Of course, it is deactivated just as quickly as soon as the offer is no longer current.
Like any good concept, however, pay-per-click also has disadvantages. Most providers use automated systems to prevent click fraud. However, you are still not completely protected against it. It is therefore quite possible that competitors or web developers can cause financial damage through abusive clicks.
A sensible alternative at this point is the pay-per-click-out model. With this model, the user is required to perform further actions in order to receive payment.
Search engines in particular, such as Google Ads or Yahoo Search Marketing, rely on pay-per-click. But social networks such as Facebook and Twitter also place ads in the form of banners or text links. Here we explain how pay-per-click works using the example of Google, probably the best-known provider.
How does the pay-per-click model work?Search engines or other websites provide advertising space. These are referred to as sponsored ads or links. Companies that want to advertise can book such an ad. However, there are of course only a limited number of advertising spaces on each page.
With pay-per-click, the principle of the highest bidder often applies. So whoever pays the most for a click also gets a better placement for their advertising material.
When a user enters something into the search engine, both organic and inorganic search results are displayed. Organic search results are unpaid, while inorganic results include your ad. If the user rates the ad as relevant and clicks on it, you as the advertiser pay a commission to the provider - in this case, Google.
Whenever you want to place an ad with a provider, you first have to create an account. With Google Ads, you can do this easily via your Google account. If your company does not yet have its own Google account, we advise you to set one up. The personal account is not suitable for this.
If you are logged in with your company's account, you can set up a pay-per-click campaign. You first define keywords for this. If a user searches for these keywords, Google will display your ad in the search results. You also set a budget that you are prepared to spend on your campaign. This is important to avoid a financial mishap.
Due to the very similar name, there is a risk of confusion here. The pay-per-click-out advertising model is based on pay-per-click, but goes one step further. Here, the user must first perform further actions before being billed.
Such activities can be, for example, clicking on the subpage or purchasing a product. This is referred to as a "click out", for which the company then pays. The original click on the advertising material, the so-called "click in", is therefore not yet recorded as a success.
The words pay per click (PPC) and cost per click (CPC) are often used interchangeably. However, CPC is not an advertising model, but refers to the average value of how much clicking on an ad costs the company. It is calculated by dividing the budget spent by the number of clicks.
The CPC should ideally be evaluated over several months. It can then be used to measure the success of a campaign. If it rises steadily, this means that less money should be spent. Higher CPC values, on the other hand, stand for highly competitive search terms.
The advantages of the pay-per-click advertising method are the linking of advertising costs to success, the immediate generation of traffic and flexible scalability. Online marketing with pay-per-click via Google Ads, Facebook Ads and Co. therefore offers great advantages.