Pay per click (PPC) is an Internet advertising model used on search engines, advertising networks, and content websites, such as blogs, where advertisers only pay when a user actually clicks on an advertisement to visit the advertisers' website. With search engines, advertisers typically bid on keyword phrases relevant to their target market. When a user types a keyword query matching an advertiser's keyword list, or views a webpage with relevant content, the advertisements may be displayed. Such advertisements are called sponsored links or sponsored ads, and appear adjacent to or above the "natural" or organic results on search engine results pages, or anywhere a webmaster or blogger chooses on a content page. Content websites commonly charge a fixed price for a click rather than use a bidding mechanism.
Although many PPC providers exist, Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter are the largest network operators as of 2007. Minimum prices per click, often referred to as costs per click (CPC), vary depending on the search engine and the level of competition for a particular phrase or keyword list—with some CPCs as low as US$0.01. Very popular search terms can cost much more on popular search engines. The PPC advertising model is open to abuse through click fraud, although Google and other search engines have implemented automated systems to guard against abusive clicks by competitors or corrupt webmasters.

Pay per click campaigns can be categorized into two major categories: sponsored match (or keyword) and content match. Sponsored match campaigns involve the display of advertisements on search engine results pages, whereas content match campaigns involve the display of advertisements on publisher websites, newsletters, and e-mails.

There are other types of pay per click programs that target product or service searches and product comparison sites. Search engine companies may participate in more than one category. PPC programs do not generate any revenue solely from Web traffic for websites that display the advertisements: Revenue is generated only when a user clicks on the advertisement itself.

Keyword-based PPC

Keyword-based pay per click advertisers bid on search terms—keywords consisting of words or phrases, and possibly product model numbers. When a user searches for a particular keyword, the list of advertiser links appears, where the ordering of those links is based on the amount bid for the given keyword. Keywords are the very heart of PPC advertising, and are guarded as highly-valued trade secrets by the advertisers. Many advertising firms offer software or services to help advertisers develop keyword strategies. Content Match, a service offered by Yahoo!, distributes the keyword ad to the search engine's partner sites and/or publishers that have distribution agreements with the search engine company.

Product engines

Product engines (a.k.a. product comparison engines or price comparison engines) are search engines for products, and let advertisers provide "feeds" of their product databases. When a user searches for a product, links to advertisers are displayed for that particular product. More prominence is given to advertisers who pay more; however, the user can typically sort by price.

Some product engines such as Shopping.com use a pay per click model and have a defined rate card.[3] Other engines such as Google Product Search, part of Google Base (previously known as Froogle), do not charge for the listing, but still require an active product feed to function.[4]

The following are notable PPC product engines:
NexTag
PriceGrabber
Shopping.com
Shopzilla

Service engines

Service engines allow advertisers to provide feeds of their service databases. When a user searches for a service, links to advertisers are displayed for that particular service. More prominence is given to advertisers who pay more; however, the user can typically sort by price or other criteria. Some pay per click product engines have expanded into the service space, while other service engines operate in specific vertical markets.

The following are notable PPC service engines:
NexTag
SideStep
TripAdvisor

Pay per call

Pay-per-call is a business model for advertisement listings in search engines and directories that allows publishers to charge local advertisers on a per-telephone-call basis for each sales lead (i.e., call) the publishers generate. The term "pay per call" is sometimes confused with click-to-call, which along with call tracking, is a technology that enables the pay-per-call business model. Pay per call is not restricted only to local advertisers: Many of the pay per call search engines allow advertisers with a national presence to create advertisements with local telephone numbers. According to the Kelsey Group, the pay per call market is expected to reach US$3.7 billion by 2010

Pay per delivery

Pay per delivery is a variation on pay per click used in e-mail marketing. E-mail marketing campaigns are charged only on the basis of e-mails that are delivered successfully.

Pay per action

Pay per action (PPA) is a variation on pay per click adopted by many search engines. An advertiser pays a specified amount upon successful completion of some action (e.g., conversion, sales lead, or sale). PPA was a beta test for advertising distribution within the Google Content Network. However, Google announced in July 2008 that the program will be discontinued in August 2008.

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