Pay-Per-Click Advertising

Pay-Per-Click or PPC is the system used to monetize search engines.  In other words, how to search engines make their money?  By selling advertising space on their results page.  The impression a user sees when searching for your search term is free, the click will be billed to your SEM account.  The more advertisers are willing to pay for clicks after searches for specific keywords, the higher the ranking for advertising, which leads to higher traffic.   The higher position is likely to cost $5 for a premium keyword, and $4.50 for a third location. A third advertiser earns 10% less than the top advertiser, while reducing traffic by 50%.  The investors must consider their return on investment and then determine whether the increase in traffic is worth the increase.
There are many reasons explaining why advertisers choose the SEM strategy. First, creating a SEM account is easy and can build traffic quickly based on the degree of competition. The shopper who USES the search engine to find information tends to trust and focus on the links showed in the results pages. However, a large number of online sellers do not buy search engine optimization to obtain higher ranking lists of search results, but prefer paid links. A growing number of online publishers are allowing search engines such as Google to crawl content on their pages and place relevant ads on it. From an online seller’s point of view, this is an extension of the payment settlement and an additional incentive to invest in paid advertising projects. Advertisers with limited advertising budgets are virtually impossible to maintain the highest rankings in the increasingly competitive search market. Therefore, it is difficult to break into the market without a big advertising budget for the top search terms. Google’s search engine marketing is one of the western world marketing leader while its search engine marketing is biggest source of profit.  Their search engine providers are clearly ahead of yahoo! and Microsoft. The display of unknown search results is free, while advertisers are willing to pay for each click of the ad in the sponsored search results.

More info about keywords here