PPC, short for Pay Per Click, is an online advertising model in which an advertiser pays a fee each time a user clicks on one of their ads, rather than paying for the ad simply to be shown.[1] PPC is most closely associated with search engine advertising, where ads appear alongside the results for the keywords a business has chosen to target, but the same Pay Per Click model is also used on social media, shopping and display networks.[2] Because costs are tied directly to visits, PPC is widely used by businesses that want measurable, fast and controllable traffic to their websites.
The Pay Per Click model for search advertising was popularised in 1998 by GoTo.com, a search engine that let advertisers bid for placement in its results and pay only when their listing was clicked. GoTo.com was renamed Overture Services in 2001 and acquired by Yahoo! in 2003. Google launched its AdWords programme in 2000 and moved to a PPC auction model in 2002, and the platform was renamed Google Ads in 2018. Microsoft introduced its own PPC search platform in 2006, which has since become Microsoft Advertising.
In a typical PPC campaign, an advertiser chooses the keywords or audiences they want to target, writes the ads, and sets a maximum amount they are willing to pay for each click, known as the bid.[1] Each time an ad is eligible to appear, the platform runs an automated auction. On Google Ads the winning position is decided by Ad Rank, which combines the bid with ad quality factors such as expected click-through rate, ad relevance and landing page experience, often summarised as Quality Score. As a result, a highly relevant ad can win a better position at a lower cost per click (CPC) than a less relevant ad with a higher bid. Advertisers usually control spending with daily budgets and measure success using metrics such as click-through rate (CTR), conversion rate, cost per acquisition (CPA) and return on ad spend (ROAS).
The largest PPC platform is Google Ads, which serves text ads on Google Search as well as shopping, display and video ads across YouTube and partner websites. Microsoft Advertising places Pay Per Click ads on Bing and its partner networks.[2] Social platforms such as Facebook, Instagram and LinkedIn also sell advertising on a cost-per-click basis, and marketplaces such as Amazon offer sponsored product ads that are charged per click. Common PPC ad formats include search text ads, shopping (product listing) ads, display banners, video ads and remarketing ads shown to people who have previously visited a website.