Pay Per Click is an Internet advertising model used on search engines advertising networks and content sites such as blogs in which advertisers pay their host only when their ad is clicked. With search engines advertisers typically bid on keyword phrases relevant to their target market. Content sites commonly charge a fixed price per click rather than use a bidding system.

Websites that utilize PPC ads will display an advertisement when a keyword query matches an advertisers keyword list or when a content site displays relevant content. Such advertisements are called sponsored links or sponsored ads and appear adjacent to or above organic results on search engine results pages or anywhere a web developer chooses on a content site.

Although many PPC providers exist Google AdWords Yahoo Search Marketing and Microsoft adCenter are the three largest network operators and all three operate under a bid-based model. Cost per click varies depending on the search engine and the level of competition for a particular keyword.

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 web developers. ¹