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Pay-per-click (PPC) advertising consists of an arrangement whereby a website operator agrees to host certain advertisements in exchange for money each time one of those ads is clicked, leading a visitor to the advertiser’s site.
In turn, advertisers pay for each click on their ads, usually through a bidding system established by a third party. These advertisements can be seen at the top and in the margins of most major search engines ("search network"), usually designated as "Sponsored Links" or something similar, as well as a large number of private websites ("content network").
Advertisers bid on keywords that will trigger the placement of their ads, either when a user enters terms into a search bar, or when those terms appear in a participating website's content. Popular terms with high traffic are much more expensive; some in excess of $10 to $15 per click.
While the revenue generated for website hosts is generally very small, only a few cents per click, some websites with extremely high traffic can generate substantial sums from this arrangement. These PPC campaigns, however, are generally very profitable for the campaign operators; Google's AdSense program represents a substantial portion of the company's profits.