PPC (pay-per-click)
Buying traffic by paying only when someone clicks, with search advertising as the archetype: bidding on the words people type when they want something. The channel of captured intent - unbeatable for harvesting demand, incapable of creating it, and priced accordingly as competitors bid for the same finite clicks.
Where it's used
Used for search ads, shopping ads and marketplace ads. Good for catching existing demand and for quick tests of messages and offers.
How to calculate it
Break-even CPC = Conversion rate × Profit per sale
Worked example
Illustrative numbersA plumber bids on "emergency plumber". One visitor in ten books a job, and each job earns about $150 in profit.
Break-even CPC
10% × $150 profit = $15
What it tells you
Pay less than $15 a click and each booking makes money. If rivals push the auction above that, improve the site's conversion rate rather than bidding higher.