Generally, even though Google's ways are for the most part dark and mysterious to the rest of us, the person who offers the most money for every time someone clicks on his site ends up in the blue bar at the top and those with punier advertising budgets in the smaller column on the right hand side of the results pages.
How does it work?
You enter into an agreement with Google in which you basically stipulate a certain amount per click, ie every time someone clicks on your link from the results page(s). Starting from 10c US per click and increasing as the competition for the keywords you want to compete against gets more popular. In certain areas the competition is so fierce that you may expect to start your bid at $2 per click! See how fast that leaves you out of pocket!
By way of illustration, you bid 50 cents per click and a ceiling of $10 per day. A monthly expenditure thus of $300.
Every time a browser clicks on your link to go and view your website 10 cents is deducted from your daily amount. If it reaches $10 by midday, your link is removed and will reappear the next day.
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