PPC or Pay Per Click is an advertising scheme used on Search Engines, Advertising Networks and on content websites and blogs. PPC is an effective marketing method since an advertiser pays the advertising network only each time a visitor, to the website on which his ads are displayed, clicks on one of his ads. This results in highly targeted traffic and visitors since visitors would click on the ads only if they’re really interested in it.

Advertisers bid on keywords for Pay Per Click campaigns where higher the bid per click, higher the chances of the advertiser’s ads being displayed on the websites affiliated with the advertising network’s websites. Advertisers predict the keywords that the audiences they are targeting will use, and hence bid on the keywords depending upon their prediction. When a visitor visits a website related to the advertiser’s keyword or searches for the keywords chosen by the advertiser on a search engine, the ads of the advertiser bidding on that keyword are displayed under a box called: “Sponsored Links” or “Sponsored Ads”. As far as the ads appearing on a search engine are concerned, when the visitor searches for the term on a search engine, a list of results are shown to the visitor. However, a box above all those results contains links to the advertiser’s website who has bid on the keyword.

Pay per click ad networks have their contextual rotating ads on various websites throughout the internet each with a different niche. When you bid on a keyword as an advertisers, the ad network’s automated softwares and scripts look up the website most relevant to your keyword and display your ads there. Once your ads are displayed and visitors start clicking on your ads, the amount per click keeps getting deducted from your account with the ad network, while a portion of the amount you pay per click goes into the account of the owner of the website on which the visitors are clicking the advertiser’s ads.

That is a brief summary of how pay per click marketing works. Though pay per click marketing is slightly expensive then most other marketing forms, pay per click is known to offer some of the highest conversion ratios.