How pay per click advertising can work for your website

Paying by the click

The main reason it is called pay-per-click advertising is that an advertiser pays the ad network only if customers click the link in the ad. If no one clicks, the advertiser doesn't pay anyone anything. The more clicks that are received, the more the advertiser pays.

Ad rates are calculated on the cost-per-click (CPC) basis. That is, the advertiser is charged a specific fee for each click between a few pennies to tens of dollars. The particular CPC rate is determined by the interest in and competition for that keyword purchased, as well since the quality and quantity of traffic going to the site hosting the ad. As you can imagine, popular keywords have a higher CPC, while less popular keywords could be had at a lower price.

This varying CPC rate is determined by having advertisers bid on the most popular keywords. That is, in ways you'll pay up to USD 5 for any given keyword. If you're the high bidder among several advertisers, your ads will appear more frequently on web pages that contain that keyword, or higher on a search results page for that keyword. If you're not our prime bidder, you won't get as much visibility if your ad appears whatsoever.

Sharing Ad Revenues

Here's something else interesting about PPC advertising; revenue from PPC ads gets shared between your ad network and also the hosting website. That's right, any website where the ad appears gets a cut from the ad revenues paid by the advertiser which is why sites agree to put PPC ads on their web pages.

If you're a marketer, this the main arrangement is transparent; you pay the ad network, plus they divvy up the funds however they do. Those sites that host PPC ads, however, get a percentage of all the funds paid by the site's advertisers. The ad network collects the revenue from the advertisers and then passes your share on to the host website.

Here's the procedure, in a nutshell:

An advertiser creates an advertisement and contracts having a PPC ad network to place that ad on the Internet.
The ad network serves the ad in question to a number of appropriate websites (and to search results pages by itself search site, of course).
An interested customer sees the ad with an affiliated website and clicks the link in the ad to get more information.
The advertiser pays the ad network, based on the CPC advertising rate.
The ad network pays the host website a small percentage of the advertising fee paid.

And remember, nobody pays anything until someone actually clicks an advertisement. If no one clicks your ad, the you pay nothing and also the site hosting the ad generates no revenue. Better for those concerned, then, that the ad receives the most number of clicks which is where context sensitivity and picking the best keywords come in.