While many companies exist in this space, Google AdWords, Yahoo! Search Marketing, and MSN adCenter are the largest network operators as of 2007. Depending on the search engine, minimum prices per click start at US$0.01 (up to US$0.50). Very popular search terms can cost much more on popular engines. Arguably this advertising model may be open to abuse through click fraud, although Google and other search engines have implemented automated systems to guard against this.

PPC engines can be categorized in "Keyword", "Product", "Service" engines. However, a number of companies may fall in two or more categories. More models are continually evolving. Currently, pay per click programs do not generate any revenue solely from traffic for sites that display the ads. Revenue is generated only when a user clicks on the ad itself.

Keyword PPCs
Advertisers using these bid on "keywords", which can be words or phrases, and can include product model numbers. When a user searches for a particular word or phrase, the list of advertiser links appears in order of the amount bid. Keywords, also referred to as search terms, are the very heart of pay per click advertising. The terms are guarded as highly valued trade secrets by the advertisers, and many firms offer software or services to help advertisers develop keyword strategies.

As of 2007, notable PPC Keyword search engines include: Google AdWords, Yahoo! Search Marketing, Microsoft adCenter, Ask, LookSmart, Miva, Kanoodle, Yandex and Baidu.

Product PPCs
"Product" engines let advertisers provide "feeds" of their product databases and when users search for a product, the links to the different advertisers for that particular product appear, giving more prominence to advertisers who pay more, but letting the user sort by price to see the lowest priced product and then click on it to buy. These engines are also called Product comparison engines or Price comparison engines.

Noteworthy PPC Product search engines include: Shopzilla, NexTag, and Shopping.com.

Service PPCs
"Service" engines let advertisers provide feeds of their service databases and when users search for a service offering links to advertisers for that particular service appear, giving prominence to advertisers who pay more, but letting users sort their results by price or other methods. Some Product PPCs have expanded into the service space while other service engines operate in specific verticals.

Noteworthy PPC services include NexTag, SideStep, and TripAdvisor.

Pay per call
Similar to pay per click, pay per call is a business model for ad listings in search engines and directories that allows publishers to charge local advertisers on a per-call basis for each lead (call) they generate. The term "pay per call" is sometimes confused with "click to call"[2]. Click-to-call, along with call tracking, is a technology that enables the “pay-per-call” business model.

Pay-per-call is not just restricted to local advertisers. Many of the pay-per-call search engines allows advertisers with a national presence to create ads with local telephone numbers.

According to the Kelsey Group, the pay-per-phone-call market is expected to reach US$3.7 billion by 2010.

Click-through rate or CTR is a way of measuring the success of an online advertising campaign. A CTR is obtained by dividing the number of users who clicked on an ad on a web page by the number of times the ad was delivered (impressions). For example, if your banner ad was delivered 100 times (impressions delivered) and 1 person clicked on it (clicks recorded), then the resulting CTR would be 1%.

Banner ad click-through rates have fallen over time, often measuring significantly less than 1%. By selecting an appropriate advertising site with high affinity (e.g. a movie magazine for a movie advertisement), the same banner can achieve a substantially higher click-through rate. Personalized ads, unusual formats, and more obtrusive ads typically have higher click-through rates than standard banner ads.

CTR is most commonly defined as number of clicks divided by number of impressions and generally not in terms of number of persons who clicked. This is an important difference because if one person clicks 10 times on the same advertisement instead of once then the CTR would increase in the earlier definition but would stay the same in term of later definition.

Account Dashboard - Although shocking at first, Yahoo's new account dashboard promises easier management and better visibility and control over your campaigns. Your new dashboard will feature a performance overview complete with graphs and a customized "watch" list of your top campaigns.

Ad Activation - In what might be the most attractive new feature for Yahoo's PPC clients, ads will go live within three to five minutes instead of three to five business days as was standard on Yahoo's old platform.

Ad Testing - Advertisers on Yahoo will now have the ability to test drive their advertising messages in order to improve the quality of their ads. This means you can easily determine which messages perform best with your target audience.

Geo-Targeting - Yahoo now allows advertisers to target by location, narrowing ad distribution to cities and surrounding areas. When done correctly, this can help improve your ROI.

Campaign Scheduling - With the promise that you'll more efficiently manage your ad spending, Yahoo now offers users the ability to control the timing of their campaigns with optional date scheduling.

Ranking - In the same way that Google's AdWords works, Yahoo will now factor in the ad's quality as well as the bid amount. The old system awarded the highest position to whomever paid the most for it. Now they will consider how well the ad actually performs along with actual bid amount for each ad.

Ad Groups - Keywords can now be grouped according to a common subject, so that keywords in groups can now be served with multiple ads. Hopefully Yahoo is right and this will save advertisers time setting up and monitoring their campaigns.

Reporting - Instead of pre-defined reports, Yahoo now offers reports that are customizable in order to deliver marketers more information that really matters to them.

After a rough go in 2006, obviously Yahoo's intent is to make their pay per click advertising program more attractive and easier to use for advertisers, thereby retaining its current client base and attracting new ones. Panama's initial announcement pleased investors, but is it enough to pull Yahoo out of the woods? We'll just have to see what the outcome of 2007's transition period brings.