Over the past ten years, the Internet has dramatically changed the way that people do business. While big companies have a significant business presence on the Web, the nature of the Internet makes it possible for small businesses to compete on equal footing. Amazon may have a well known Website, but there is nothing to stop Bob Smith from opening a competing Website called BobSmithsBooks.com. With the Internet, there is room for everyone to do business.

Having a presence on the Internet hardly guarantees success in business, however. In order to make sales, you have to have customers come to your site. Attracting customers, or "traffic", is possibly the greatest problem that most Website owners face when moving their business onto the Internet. One can advertise a business using traditional offline media, such as radio or television, but most Website owners would rather try to attract visitors that are already on the Web. For drawing visitors who are already on the Internet, there may not be a faster method of obtaining traffic than pay per click advertising.

Pay per click, or PPC advertising, is an advertising system where businesses can purchase ad space through the major search engines. When someone does a search using Google, for instance, paid advertising appears right alongside the search results that Google provides. Companies bid for top placement on these search results pages by placing bids on the search terms themselves. They pay the search engines every time someone clicks on the link in one of the ads. Depending on the search topic, the bids may range from as little as a few cents to as much as one hundred dollars per click.

There are a number of advantages to using PPC advertising over other media:

The results are fast. With Google's Adwords program, businesses can compose their ad and have it shown to customers in a mere five minutes. No other advertising medium offers the opportunity to have ads shown to potential customers as quickly as pay per click.

The advertiser can choose the price. Advertisers bid on the price they are willing to pay for each keyword. This permits advertisers with modest budgets to still have their ads shown alongside the ads of businesses with deeper pockets.

Companies can create daily, weekly, or monthly budgets. You can limit your spending to the amount of money in your budget. If you can only afford to spend $100 per month on advertising, you can decide if the ads are to be shown all at once or spread over the day, week or month.

The benefits of PPC advertising are obvious. You can sometimes have visitors at your Website in a few minutes and you can spend as little or as much money as you like.

There are some potential problems with PPC ads, however:

The market is fiercely competitive. If you are bidding on terms that are particularly competitive, you may find that you will have to pay several dollars for every click when your budget may only permit a few pennies. Prices fluctuate widely among different keywords. If fifty advertisers all outbid you, your ads may be displayed on a Web page where few people will see them.

Not all search terms produce equally good results. You may find yourself placing bids on terms that bring visitors to your Website but do not generate sales. Pay per click advertisers need to closely watch the performance of their ads to make sure that the terms they are bidding on generate both traffic and sales.

Anyone who is considering trying their hand at pay per click advertising should probably start with a modest budget and be willing to engage in a lot of experimentation in order to find the best results. While the PPC advertising method is quite successful, it can also provide a good opportunity to spend a lot of money on advertising without a lot to show for it.