Glossary

AdTech industry is vast and ever-changing. It might be hard to keep up with all the new slang, but worry not - our glossary will keep you properly updated!

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Pay Per Click (PPC)

What is Pay Per Click (PPC) ?

A payment model where the advertiser gets paid every time a user clicks on an ad. PPC is an abbreviation for Pay-Per-Click, a marketing approach on the internet that, in a nutshell, increases visitors to your website. A sponsored link is a link that displays your product or service in exchange for a payment. PPC advertising is most commonly run on search engines like Google. Most search engines (such as Google) and social networks use the pay-per-click business model (e.g., Facebook). PPC platforms like Google Ads, Facebook Ads, and Twitter Ads are extremely popular. The pay-per-click business model relies heavily on keywords.

A search engine's online ads (also known as sponsored links) only appear when someone uses a keyword associated with the offered product or service. Therefore, organizations that use pay-per-click models investigate and analyze the most relevant keywords to their products or services. Investing in appropriate keywords can lead to an increase in the number of clicks and, as a result, increased revenues. Advertisers and publishers alike benefit from the PPC model. Advertisers benefit from the strategy since it can target a specific demographic actively looking for similar material. As a result, advertisers can save a significant amount of money with an effective PPC advertising campaign because the value of each visit (click) from a potential customer far surpasses the cost of a publisher's click.

The pay-per-click model is a major source of income for online publishers. Consider Google and Facebook, both of which offer completely free services to their users. Online businesses can monetize their free offerings by leveraging online advertising, notably the PPC model of online advertising. The flat-rate model or the bid-based model is commonly used to determine the cost-per-click advertising rates. The flat-rate pay-per-click approach involves an advertiser paying a set amount to a publisher for each click. Publishers typically keep a running tally of the various PPC rates that apply to multiple parts of their site.

Take note that publishers are usually willing to bargain on the price. If an advertiser proposes a long-term or high-value contract, a publisher is inclined to reduce the set cost. In the bid-based model, each advertiser submits a bid with a maximum amount of money they are ready to spend for an advertising place. After then, a publisher holds an auction with the use of computerized bidding software. As soon as a user clicks on an ad, an auction is started.

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