Pay per click is an internet method that is used in two ways, in the first people allow ads to be placed on their website and the advertiser only pays for the ad if a site visitor clicks on it. The second way that pay per click is used is tied up with search engine optimisation, and website owners typically bid on key words and phrases that are relevant to the market they are targeting. This is the way that Google works; some companies however do not have a bidding system but use a fixed price for pay per click.

Websites display adverts that relate to the advertisers keyword list, or if a blog or content site has content that relates to that keyword. Among the big three Google, Yahoo and Microsoft, the cost per click is determined by the level of competition for a particular keyword or phrase and the search engine. Sponsored search engine placement is where advertisers bit on keywords to have their ads appear alongside or above where the results for certain search terms appear. Pay per click and keyword research is at the heart of most internet marketing campaigns and some companies will help advertisers to develop their keyword strategies.

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