PPC "display" advertisements, also known as "banner" ads, are shown on web sites with related content that have agreed to show ads and are typically not pay-per-click advertising.
Social networks such as Facebook and Twitter have also adopted pay-per-click as one of their advertising models. Websites that utilize PPC ads will display an advertisement when a keyword query matches an advertiser's keyword list, or when a content site displays relevant content.
However, in many cases advertisers can negotiate lower rates, especially when committing to a long-term or high-value contract.
In both cases, the advertiser must consider the potential value of a click from a given source.
This value is based on the type of individual the advertiser is expecting to receive as a visitor to his or her website, and what the advertiser can gain from that visit, usually revenue, both in the short term as well as in the long term.
If the main purpose of an ad is to generate a click, or more specifically drive traffic to a destination, then pay-per-click is the preferred metric.
Once a certain number of web impressions are achieved, the quality and placement of the advertisement will affect click through rates and the resulting pay-per-click.
Such advertisements are called sponsored links or sponsored ads, and appear adjacent to, above, or beneath organic results on search engine results pages, or anywhere a web developer chooses on a content site.
Pay-per-click, along with cost per impression and cost per order, are used to assess the cost effectiveness and profitability of internet marketing.
In addition to ad spots on SERPs, the major advertising networks allow for contextual ads to be placed on the properties of 3rd-parties with whom they have partnered.
These publishers sign up to host ads on behalf of the network.
In return, they receive a portion of the ad revenue that the network generates, which can be anywhere from 50% to over 80% of the gross revenue paid by advertisers.
These properties are often referred to as a content network and the ads on them as contextual ads because the ad spots are associated with keywords based on the context of the page on which they are found.
Pay-per-click has an advantage over cost per impression in that it tells us something about how effective the advertising was.