Management Information System (MIS) Practice Exam

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If a company's website is listed in the sponsored list of a search engine, the revenue is based on a ________ basis.

Pay-per-sale
Pay-per-click
Pay-per-conversion
Click-through

The correct answer is: Pay-per-click

When a company's website appears in the sponsored list of a search engine, the revenue model typically involves payment for each click that leads users to their website. This model is known as pay-per-click (PPC). In this context, businesses pay a predetermined amount for each time a user clicks on their advertisement. This approach is widely used in online advertising because it allows companies to control their spending while targeting potential customers effectively. The more clicks generated from the ad, the more traffic is directed to the company's website, which can lead to increased sales or inquiries. The other options, while related to online marketing, represent different revenue structures. Pay-per-sale refers to being charged only when a sale is completed through the referral from the ad, which is not how PPC operates. Pay-per-conversion indicates payment for every defined user action (beyond just clicking), which may also include sign-ups or purchases, but does not specifically apply to the click-driven model like PPC. Click-through is often used to describe the action of clicking on an ad but doesn't specifically refer to a payment structure.