Pay-per-click advertising is a method of Internet marketing that utilizes search engines and the use of keywords and phrases. The advertiser’s ad (known as a “sponsored link” or “sponsored ad”) appears on the search engine page along with the results from the search that used the advertiser’s keywords.

The advertiser’s objective is to have the browser click the ad.

When the browser does so, she goes to the advertiser’s website.

The advertiser then pays a fee to the search engine hosting the ad.

It’s exactly as the name implies: The advertiser “pays per click.”

A multi-billion dollar business already, pay-per-click advertising continues to be one of the fastest growing types of online advertising.

How do you do it?

You bid on key words and phrases, the words you think people will type into a search engine when looking for information about the product or service you provide.

If you sell leather wallets, for example, you’d bid on the words “leather” and “wallet.”

Then, if your bid is high enough, your ad appears on the search engine page, right along with the results from the search that used your keywords.

If I typed “leather wallet” on the search engine XYZ, for example, and you had paid XYZ for the “rights” to that phrase, your ad would appear along with the list of results I get from my search.

So if I’m in the market for a leather wallet (which is likely; I typed in “leather wallet,” remember), I might click your ad before I even start clicking the natural search results. In other words, I could be on your site in a matter of seconds, scrolling through your inventory -- all thanks to your ad.

Importantly, you still have not paid anything to the search engine beyond your bid price.

And you won’t, either, until your ad is actually clicked by a browser.

How much per click?

That varies wildly.

On some search engines and/or for certain products advertised, you might pay as little as a single penny each time your ad is clicked. However, on the more popular search engines, prices can rise into the dollars-per-click domain. So if you don’t get sales, pay-per-click advertising can get expensive.

However, as the technology improves, PPC has become more affordable, too. This is especially true for small business. For example, you could direct your PPC campaign to within a 50 mile radius of your place of business; a crucial point for companies is they a local mall or a downtown café that rely on local business.

Some search engines offer monthly fee arrangements, too; or, you can get your ad on their page through a predetermined, agreed-upon budget.

So really, there are ways in which you may still pay for PPC, above and beyond the clicks or no clicks model.

But this, of course, is simply another sign that PPC continues to evolve -- and fast -- right along with the Internet itself.

Everybody’s doing it!

Practically all major search engines now offer pay-per-click advertising. It has become a multi-billion dollar business. (In 2006, Google alone took in $6 billion in PPC-related ad revenue.)

And because it has been around (albeit in rougher, less refined forms) almost as long as the internet as we know it has been around (let’s say the mid-90s) PPC seems to be standing the test of time. In fact, in Internet marketing years, PPC has been around forever!

And it is still one of the fastest growing forms of advertising on the net.