Online advertising has been a major component of the internet. Online advertisements may be in the form of banners or text links. For an owner of a website, hosting these ads are means to compensating his efforts in making his website and giving information in his site.

These advertisements are just some of the ways that a website owner can make money online and one scheme that websites can actually engage in is the pay per click scheme. In this scheme, advertising cost involved is dependent on the clicks made to the banners and links.

In pay per click, the number of clicks represents how many consumers online are interested on the product or the business being advertised, thus business owners pay website owners every time their ads are being clicked.

The cost of a click of an ad is however determined in two ways in pay per click marketing. It can be flat rate or determined through bidding.

In the flat rate method, the business owner and the website owner agrees on a rate or the cost of each click. Most often, the advertiser will have a list of rates for every webpage that his ad will appear. These rates are usually dependent on the relevance of a particular webpage to the advertiser’s ad and the ability of its content to attract site visitors that would become potential customers to the business.

In the bid-based method, the cost of a click is determined by how much a business owner is willing to pay for one click to his ad. If the business owner wins the bidding, the maximum amount he bids for a click will be the cost of a click to his ad. The bid-based pay per click is usually used in advertising in search engines like Google. The winning bidder will then have an ad spot in the search engine results page.

Using pay per click marketing in advertising a business online has no standard rates when it comes to the cost per click of an ad. The rate is generally based on how much a business owner is willing to pay per click of his ad in a particular ad spot - may it be in search engines or other websites. One important thing in pay per click though is that, a good number of visitors to a website would mean you could bargain a higher cost per click of an ad posted in the site.