PPC is an online advertising model in which advertisers pay each time a user clicks on one of their online ads. These ads appear when people search for things online using a search engine when they are performing commercial searches, meaning that they’re looking for something to buy. This could be anything from a mobile search to a local service search (someone looking for a dentist or a plumber in their area) to someone shopping for a gift or a high-end item like enterprise software. All of these searches trigger pay-per-click ads.
In pay-per-click advertising, businesses running ads are only charged when a user actually clicks on their ad, hence the name “pay-per-click.” In order for ads to appear alongside the results on a search engine (commonly referred to as a Search Engine Results Page, or SERP), advertisers cannot simply pay more to ensure that their ads appear more prominently than their competitor’s ads. Instead, ads are subject to what is known as the Ad Auction, an entirely automated process that Google and other major search engines use to determine the relevance and validity of advertisements that appear on their SERPs. Here ad auction means that advertisers must bid on the terms they want to “trigger,” or display, their ads. These terms are known as keywords.