Pay per click (PPC) is the model for buying online advertising in which you pay only for the clicks you receive, not for the times your ad is shown.
Anyone opening an ad account for the first time brings two wrong assumptions along: that they decide what they pay, and that the price depends on how much they bid. The auction that allocates the slots works differently, and knowing how is the difference between a campaign that stands up in the profit and loss account and one that burns budget.
Who decides what you pay for each click
You set a ceiling, not a price. The official Google Ads Help Centre calls that ceiling the maximum CPC bid and defines it as "the highest amount that you're willing to pay for a click on your ad", adding that it is "the most that you'll typically be charged for a click, but you'll often be charged less, sometimes much less". The figure that actually ends up on the invoice is called the actual CPC and appears in reports alongside the average cost per click.
The auction is repeated for every single search. Google lists six elements that determine Ad Rank:
- the maximum bid you have set
- the quality of the ad and the landing page
- the minimum thresholds Ad Rank has to clear for that position
- how competitive the auction is at that moment
- the context of the search: terms typed, location, device, time of day
- the expected impact of assets and other ad formats
Four of these six have nothing to do with money. That is why, again according to Google's documentation, "higher quality ads can often lead to lower CPCs", even against a competitor who bids more. Above a certain threshold, raising the bid does not buy position: it buys eroded margin.
Paying per click is only one way to buy advertising
PPC is a billing model, and on the platforms it sits alongside others. Google sets them out in its guide to bid strategies.
| Model | What triggers the charge | Goal it suits |
|---|---|---|
| CPC (pay per click) | a click on the ad | driving traffic to the site |
| CPM | a thousand impressions | reach on YouTube and the Display Network |
| vCPM | a thousand viewable impressions | awareness, without aiming for the click |
| tCPM | a thousand impressions, with a target average CPM | maximising unique reach |
| CPV | video views and interactions | video campaigns |
| Target CPA | conversions, with a target cost per action | increasing the number of conversions |
| Target ROAS | conversion value | increasing the value generated |
On the Search Network the charge stays tied to the click even when the strategy works on target CPA or ROAS: what changes is how the bid is calculated at each auction, not the event that generates the cost. Worth remembering when you hear that with automated bidding "it's not PPC any more". The billing model is the same.
The clicks you are not charged for
Google calls clicks that do not come from real interest invalid clicks and defines them as "clicks on ads that aren't the result of genuine user interest, including intentionally fraudulent traffic and accidental or duplicate clicks". The documentation gives three examples:
- manual clicks meant to increase someone's advertising costs or the profits of the site hosting the ad
- clicks by automated clicking tools, robots or other deceptive software
- accidental clicks that provide no value to the advertiser, such as the second click of a double-click
On these the official position is clear: "You won't be charged for invalid clicks or impressions as they provide little or no value." The filter is automatic and runs before billing, so it does not require a report from you. One documented side effect is that a report occasionally shows more conversions than clicks: the click was removed as invalid, the conversion that came from it was not.
In our experience this is the first objection from people who have never run campaigns, well before cost. The fear of competitors' clicks weighs more than the budget.
How big pay-per-click advertising is in the UK
The IAB UK Digital Adspend study puts UK digital advertising at £40.5bn in 2025, up 10% year on year. Within that total, search advertising is worth £17.9bn, 44% of digital spend, and grew 6%.
Roughly 44p of every pound spent on online advertising in the UK therefore goes on search ads, the format where paying per click is the rule. It is growing, but more slowly than digital as a whole: video advertising grew 20% over the same period, social 21%. Read together, the numbers say that paid search in the UK is a mature market, where extra budget usually has to be taken from someone else in the same auction.
Where you can buy per click, beyond Google Ads
Google Ads is the most widely used platform, not the only one. Microsoft Advertising (Bing and its network), Amazon Ads, Meta for Facebook and Instagram, LinkedIn, TikTok and Pinterest sell space charged per click, with different auction rules and traffic quality. On Google some ads also run outside the search results, on search partners, and it is worth knowing when to exclude them.
The model was not born at Google. Bill Gross, founder of the Idealab incubator, is credited with inventing modern pay per click with GoTo.com, later renamed Overture Services and acquired by Yahoo!. Google adopted the same principle and built AdWords on it, now Google Ads.
When paying per click makes sense and when it does not
The sums come down to three numbers: what a click costs, how many clicks it takes to get a conversion, and what that conversion is worth. With a CPC of £3 and a conversion rate of 2%, every sale costs £150 in advertising alone. On a £200 product that leaves £80 of gross margin, the campaign loses money on every order, and no rewrite of the ad will close that gap.
This is where a campaign is decided, before the choice of keywords and well before the ad copy. If the margin per conversion does not cover the acquisition cost, either you change channel or you change the product you put into it. If it does cover it, the job becomes raising the click-through rate and the quality of the landing page, the two levers that bring the actual CPC down without touching the bid. We have written a separate guide on the conditions in which it makes sense to launch a campaign, and if you would rather hand it to someone, we offer Google Ads management.
One limit of the calculation is worth stating: it only holds if conversions are tracked properly. Tracking that counts the same order twice, or loses mobile orders, produces numbers that look excellent and are not. Before judging a CPC, check what you are really measuring.
The per-click model takes for granted something that over the last two years has stopped being a given: that the click happens. When the answer appears within the results page, the advertiser does not pay, and so far so good; the point is that the query produces traffic for nobody, paid or organic. Anyone planning a budget today should ask not only what a click costs in their sector, but how much of the demand is exhausted without producing a single one.
Pay per click FAQs
PPC is the buying model, CPC is the metric that measures what each click cost. In its documentation Google uses the two terms almost as synonyms and says that cost per click is sometimes called pay-per-click.
There is no price list: the price comes out of an auction and varies by sector, keyword, device, location and time of day. You set a maximum ceiling, and the actual CPC you pay is almost always below it.
Google classes those clicks as invalid and says it does not charge for them. The filter is automatic and works before billing, so there is no need to open a report for every suspicion.
No, they are two channels with different timescales and costs: paid traffic stops the moment you switch campaigns off, organic traffic stays but takes months to build. They work better together, especially on the same commercial keywords.
No. Google Ads is an advertising platform, pay per click is one of the billing models it uses. Microsoft Advertising, Amazon Ads and Meta also sell space per click.
