Pay-Per-Click marketing has become an online phenomenon, with marketers only paying for traffic they receive. As Internet marketing has evolved, pay-per-click is seen by many as middle ground between paying per impression and paying per sale. Advertisers only pay when they receive traffic that may or may not be targeted.
The pay-per-click advertisements are usually displayed with advertisement from highest paying bidder in top position.
Navigating complex web of Internet marketing, publishers and marketers are often confronted with terms that seem foreign. This simple guide will assist marketers in navigating Pay-Per-Click marketing model.
Bid - The amount that an advertiser is willing to pay for a click on a specific keyword.
Budget - The amount of money that an advertiser sets aside for an advertising campaign. Different publishers allow for advertisers to set daily, weekly or monthly budgets.
Clickthrough Rate (CTR) - The percentage of clicks on a link. This is usually a percentage based on total number of clicks divided by number of impressions that an advertisement has received.
Conversion Rate - The relationship between visitors to a web site and actions considered to be a "conversion", such as a sale or request to receive more information: percentage of people whose clicks have resulted in a sale or desired action in relation to total number of clicks on an advertisement.
Cost Per Click (CPC) - The cost or cost-equivalent paid per click-through to an advertiser's website.