Pay-per-click

Pay-per-click describes how advertising is charged, not where it runs. Under this model your advert can appear a thousand times at no cost, and you are billed only when somebody chooses it and arrives. The three letters get used loosely, often as a synonym for online advertising in general, and the looseness matters: several of the platforms people call PPC do not charge per click at all.

In short

• It is a billing model, not a platform and not a channel.
• Search advertising is genuinely per click. Most social advertising is not.
• The highest bid does not automatically win, because relevance is weighed too.
• Cost per click is a diagnostic, and a poor thing to manage towards.

What the charge landing on the click changes

Advertising sold by appearance buys attention, and attention is argued about afterwards. Advertising sold by the click buys arrivals, and an arrival either turned into something or it did not.

That difference decides how the results should be judged. Per-click buying pushes the risk of a poorly performing advert onto the platform, because an advert nobody chooses costs nothing to show. In exchange, it pushes the risk of a poorly performing website onto you, since the charge has already happened by the time somebody sees your page. Everything after the click is your problem, which is why the landing page is part of the advertising cost rather than a separate project.

The other ways advertising is sold

Knowing what per click is being contrasted with is most of understanding it.

• Per thousand impressions. You pay for the advert being shown, whatever happens next. This is how most awareness buying works, and how most social campaigns are actually billed.
• Per action. You pay when something specific happens, such as an installation or a sale. Rare in the platforms a small business uses directly, common in affiliate arrangements.
• Per view. Used for video, where a view has a defined length and the charge lands once somebody has watched that much.
• Flat placement. A fixed sum for a position over a period, which is how most directory listings and sponsorships are sold.

Which platforms actually charge this way

This is where the vocabulary misleads people, and it changes what you should expect from a report.

Search advertising is genuinely per click, on Google and on Bing, and so are Amazon’s sponsored product listings. Meta and TikTok are different. Most of their campaign objectives are billed per thousand impressions, and the platform decides who to show the advert to based on who it predicts will do the thing you asked for. You will still see a cost per click in the reporting, but it is a figure calculated after the fact rather than the thing you were charged for.

The practical consequence is that paid social cannot be judged with the same instincts. On a per-click platform, a poor advert costs you nothing until somebody chooses it. On a per-impression platform, a poor advert spends the budget regardless.

Why the highest bid does not win

Nothing is bought in advance. Each time somebody searches, an auction runs in the time the page takes to load, and your bid is only one of the inputs. The others are how likely your advert is to be clicked, how well it matches what was typed, and what the page behind it is like on arrival.

Because those carry real weight, a smaller advertiser who writes well and sends people somewhere sensible can appear above a larger one who does neither. The full mechanics, including what you are actually charged once you win, are set out on the Google Ads page.

Working out what a click is worth

This is the calculation that turns a click price from an opinion into a decision, and it is done in the wrong order surprisingly often.

Start with what a customer is worth to you, not what a visitor is worth. Then divide by how many visitors it takes to produce one customer. If one visitor in fifty becomes a customer, a click is worth a fiftieth of a customer. That number is your ceiling. Anything below it is profitable and anything above it is not, and no industry benchmark can tell you where it sits.

Two things move it, and neither is the bid. Raising what a customer is worth, through a larger first order or repeat business, raises the ceiling. Raising the share of visitors who become customers raises it too, which is why work on the destination page changes what you can afford to bid.

Why cost per click is a poor thing to manage

Almost every account that is being watched closely and performing badly is being watched through this number.

• It can be lowered by getting worse. Bidding for cheaper, vaguer searches brings the average down and brings in people who were never going to buy.
• It says nothing about what happened next. Two clicks at the same price are not the same purchase.
• It is not comparable between businesses, because it depends entirely on what a customer is worth in each of them.
• It moves for reasons outside the account, such as a competitor entering or leaving the auction.

The number worth managing is the cost of a customer, which needs tracking in place before the spending starts rather than reconstructed afterwards.

The weekly job nobody schedules

Per-click accounts do not drift because somebody set them up badly. They drift because keywords match loosely, the searches you never intended arrive gradually, and nothing in the account announces it.

The only place the problem is visible is the report of what people actually typed, and closing the gap means adding those terms as negative keywords. That is maintenance rather than setup, it takes minutes a week, and it is the difference between an account that holds its performance and one that quietly widens its losses over a year.