Pay Per Click (PPC)

Pay Per Click (PPC) is an advertising model used on websites, advertising networks, and search engines where advertisers only pay when a user actually clicks on an ad to visit the advertiser's website. When a user types a keyword query matching the advertiser's keyword list, the advertiser's ad may appear on the search results page. These ads are called "sponsored links" or "sponsored ads" and appear next to, and sometimes, above the natural or organic results on the page. The advertiser pays only when the user clicks on the ad.

Here is a video from Google's Chief Economist, Hal Varian, explains the AdWords Ad Auction and how

PPC on the Google Network

To make the most of this medium the advertiser needs to "steal eye balls". The advertiser needs to refer traffic to his/her web site. The best way to do this is by assigning the Pay Per Click (PPC) to another web site.

For example,

The Google ads on this web site Driving School are "stealing" the quality traffic that this web site is getting.

Find a web site that has quality traffic, and place your ads there.