Paid Search Ads are search ads that appear on search engine result pages of search engines.
Google AdWords is by many measures the most popular paid search platform used by advertisers, followed by Bing Ads, which also serves a significant portion of ads on Yahoo.
Paid search ads can sometimes be called
- PPC (pay-per-click)
- PPC (pay-per-call) – some ads, particularly those served to mobile search users, may be charged by the number of clicks that resulted in a direct call from a smartphone.
- CPC (cost-per-click)
- CPM (cost-per-thousand impressions)
- Most search ads are sold on a CPC / PPC basis, but some advertising options may also be sold on a CPM basis.
- SEM (Search Engine Marketing)
In essence you bid on a keyword or group of keywords and when your customer searches for that word or phrase your ad could appear.
For it to appear you need to win the ad auction. Every time someone searches all advertisers who are bidding on that word or phrase enter the auction and based on a number of conditions, including bid, will be ranked and then displayed to the searcher.
Here is a quick video to explain how it all works.