Internet marketing / search engine optimization (SEO) metric often shortened to PPC or cost-per-click. Pay per click (PPC) is an Internet advertising model where advertisers agree to pay a publisher a amount for each visitor directed to the advertisers' website. Visitors are directed to the advertisers site when they click on a hosted advertisement. This advertisement may be on the advertisers own site or on a third party (partner) site.
Search engines usually offer a PPC advertising model where advertisers bid on keyword phrases relevant to their target market. The bid price is then dictated by how competitive the market is and how much advertisers are prepared to pay for an advertisement.
Content sites that offer advertisements usually charge a fixed price per click.
Pay per Click (PPC) should not be confused with Pay per Impression (PPM). In the case of PPM, the advertiser is effectively charged every time the advertisement id shown (i.e. every time there is an impression of the advertisement). Advertisers usually bid how much they are willing to spend for their ad to show up 1000 times in the PPM model.
PPC advertisements are usually tailored to the content on the hosted page. In the case of search results, the advertisements relate to the search term used, otherwise the advertisement presented will as far as possible be related to the content on the hosting website page.
Among PPC providers, Google AdWords, (Microsoft / Yahoo!) adCenter are the largest PPC network operators. Both use a bid-based model to determine the price and placement of advertisements.
It is important to notice that PPC advertisements can be placed above or to the right of the results from a Google or Bing search. Originally, paid adverts only were placed to the right of the search results, but studies showed that users mainly click results at the top of the search page and as advertisements are the major revenue source to Search Engines, the placement was changed.
It is well known that organic (or natural) search results are based on the search engine algorithm that is structured to rank the results on merit. This is in contrast to the PPC results that are purely financial (even though there are claims that there is some evaluation of the content). Searchers therefore should always click on the organic search results if they want the best result from their search.