What is the difference between Flat rate PPC and Bid based PPC?

With flat-rate PPC bidding, advertisers (your business) work with publishers (search engines) to agree on paying a fixed amount for every ad click. Publishers typically have established rate cards for keyWord terms that are based on the level of competition that exists for each specific term. This means highly sought after keyWords will carry a higher fixed price when compared to terms that receive fewer searches.

Rates can vary between search engines, and advertisers can usually pay a higher rate for increased visibility.

Unlike flat-rate PPC, keyWords in a bid-based PPC campaign can vary in cost depending on the demand for a given term at the moment of its search. AdWords and AdCenter determine how much an ad click generated by a keyWord search is by running a real-time auction.

To determine how much a click on that ad will cost, the publisher will run a real-time auction that takes a variety of factors into account to determine which advertiser has the highest bid. The higher an advertiser’s bid, the higher their ad will appear on the page, a position referred to as ad rank.