Pay per click is a very popular method of internet advertising in which the web host is paid whenever the concerned advertisement is clicked. The charge per click is usually fixed beforehand. With the recent increase in the number of bloggers and the increasing popularity of Google ad sense, this model of advertising is being opted for by many companies. This whole idea of dealing with these advertisements and deciding the details of the placement of the advertisement is termed Pay per click management.

The money obtained by the web host for every click on the advertisement is termed Cost per click. Every click on the advertisement redirects the user to the concerned web site. Web site that uses this new model of advertising displays an advertisement as soon as a related keyword is searched for or relevant content is displayed on the webpage. The position or placement of the pay per click advertisement is decided by the web host. It must be remembered that an intelligent and strategic placement of the advertisement may be instrumental in generating considerable revenue. These advertisements that redirect the web browser to the concerned web page are known as sponsored links. These sponsored links may also appear in the pages of search engines displaying results associated with the concerned keyword. This can be very useful since people searching for a keyword may be also interested in services relating to that word. Therefore a strategic placement of the pay per click advertisement or ad word management may be very helpful for the concerned web site.

The cost per click is determined by following two models that are of prime importance in the context of pay per click management. The first model is the Flat rate model in which there is a specific amount obtained by the web host for each click. This amount is decided upon by the advertiser and the publisher or web host before the advertising process is put into effect. In this case the cost per click varies depending on the content of the web page. Web sites that are expected to attract more valuable visitors are naturally the ones that earn more money per click.

The other model of cost per click followed on pay per click management is known as the bid based pay per click model. In this case a private auction is held by the web host in which the advertising companies participate for a specific advertising position on a web page. In this way the web host gets to know the specific amount each advertiser is willing to pay for a particular advertising position. The web host can then assign the advertising space to the advertisers accordingly. However, this model can only be followed by those web sites which are very popular.

The concept of pay per click management has come a long way since its first implementation in February, 1998. A strategic advertisement at the right place can be profitable for the advertising company as well as the concerned website.