Cost-per-Click, or CPC, advertising is when an advertiser displays an ad at no charge, and only pays when a reader clicks the ad. Google AdSense is currently the biggest provider of Cost-per-Click advertising.
There are advantages and disadvantages to accepting ads based on Cost-per-Click.
The biggest advantage is that Google does most of the work attracting advertisers. They also take a large amount of responsibility for placing contextual-based ads.
Cost per click advertising only works effectively when the ads are contextual-based. Websites today are highly specialized, and their readers are highly targeted. Because of this, they will only click ads targeted to them.
One of my clients produces a website for first-time mothers. Her ad revenue is fairly high because the ads on her site are highly targeted to young women who are expecting or who have recently given birth. On this type of website, Cost-per-Click is ideal. However, if the ads displayed were not in proper context, for example advertising the latest Xbox video game or erectile dysfunction drugs, her revenue would go in the toilet.
There are two disadvantages to Cost-per-Click.
First, certain topics are not very conducive to cost per click advertising. Another client has a website with factual information about birds for birdwatchers. There are only a handful of advertisers that have bid on the key words associated with his website. Because of this, bids are low and so are revenues. He had to turn to another form of advertising just to cover his costs.
The second disadvantage is that your website must be highly targeted and well-written. If your website is a personal blog whose topic changes as quickly as your mind and your life experience, your find a cost per click advertising will generate revenue similar to a roller coaster. If you hit a hot topic at the right moment, you may see a big boost in your revenue, and other days you revenue will dry up. More and more, you'll find yourself writing toward your advertisers' whims rather than your own interests.
In summary, if you have a highly targeted website, and your topic has lots of advertiser competition, you will do well to take advantage of Cost-per-Click advertising.
If you'd like to get your feet wet with Cost-per-Click, I recommend Google AdSense. If you don't have a Google AdSense account, please use the link on this blog to get started.