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Pay-per-click is calculated by dividing the advertising cost by the number of clicks generated by an advertisement.
These various amounts are often related to the content on pages, with content that generally attracts more valuable visitors having a higher PPC than content that attracts less valuable visitors.
Advertisers are only charged when a user actually clicks on their ad, hence the name “pay-per-click.” Due to the nature of keywords and the role they play in paid search, pay-per-click advertising can also be referred to as keyword advertising.
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.
Pay-per-click has an advantage over cost per impression in that it tells us something about how effective the advertising was.
Clicks are a way to measure attention and interest.
In both cases, the advertiser must consider the potential value of a click from a given source.