Pay per click marketing has gained popularity as a cost-efficient advertising tool to promote businesses online and in turn, it has also become one of the popular ways where a website owner can earn by hosting the ads.
Pay per click works as an advertising means whereby companies choose websites where they can post their ads, and every time users click on the ad, the advertiser will pay the website owner.
Pay per click marketing came out in 2002 and has been used widely among websites today. One concern of pay per click marketing is that, billing differs depending on the agreement between the advertiser and the website owner.
The first thing to know is determining the cost per click of an advertisement. There are only two primary types or models of determining the cost of each advertisement click. The first one is the flat rate model and the second type is the bid-based model.
In using pay per click, it is essential to keep in mind that the advertising campaign does not end in the number of clicks or site visits you gain but in the increase in sales that will result from the increase in customers.
Flat Rate PPC
In the flat rate model, the cost per click is an amount agreed upon by the advertiser and the website owner. As the name suggests, the cost per click is fixed.
Publishers, or the companies, usually provide a rate card for the advertisers, the website owners. The clicks will have standard rates depending on which web page the customer landed.
Bid-Based Costing
In the bid-based model, the advertisers are allowed to compete with other advertisers in the Internet through bidding as to who can collect the lowest amount of cost per click.
This can also mean that advertisers can bid of the maximum amount of money he is willing to pay for an advertisement space through the use of keywords used in search engines. If a consumer types a keyword, hits a website URL, and the web page contains the ad spot, an automated auction takes place.
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