Cost per Click, or CPC, is the payment received by search engines and publishers for every click on a link or advertisement that takes visitors to an advertiser’s website. Under this scheme, internet surfers are presented with the possibility to make purchases no matter what kind of website they are on.
There are two ways by which the CPC may be set. Under the flat-rate scheme, a fixed cost for each click is agreed on. The amount could be based on the kind of website and the compatibility of the target audience it caters to with that of the advertiser’s target market. Lower rates per click can be agreed on, usually if there is a long-term arrangement with the publisher.
On the other hand, under the bid-based model, the advertiser will have to enter a competition against other advertisers. This is facilitated by a publisher or a network of advertisers.
This scheme also presents opportunities to individuals who would like to maximize the use of the internet for income generation. Bloggers and website publishers may open their sites to advertisers, who then give them incentives by paying them a certain amount. This is viewed by many as an excellent source of passive income, and is quickly gaining popularity among individuals who work from home.
It is possible for competitors to cheat the company employing this scheme by having people click on the advertisements and thus produce inaccurate data. This is known as click fraud, and there are now safeguards set against this kind of abuse.
Some of the most well-known providers are Google AdWords, Microsoft adCenter, and Yahoo! Search Marketing.