Google Adwords

I've already talked about those ads you see on websites, well those ads need to come from somewhere don't they. AdWords is Google's program for advertisers.
Any site that wishes to participate bids for "keywords" that are relevant to their product, service, or site and then creates ads to attract hits. These ads show up on private websites, like this example, and on the right side of Google search results like this search for "Free sales letters and tools" As you can see from this Google search you received the content related sites that you searched for but you also get some related ads that are sponsored.
Now here is where Google is genius. Instead of simply subjecting surfers to any ads that anyone is willing to pay for, they actually police the ads that are running. On some pay per click programs, whoever is willing to pay to most wins. Google uses a performance model. In other words an ad that is the most relevant and therefore receives the most clicks will move ahead of an ad that may pay more but isn't as effective. This simple philosophy is why Google has quickly dominated the PPC world.
Okay...and now the really big innovation
Regional targeting. Google recently introduced a system that allows advertisers to target certain metropolitan markets only. In other words, a remodeling contractor who only wants to do kitchen remodels in say, Denver, can bid on the keyword phrase "kitchen remodel" and only have his ads show up for people who live in and around Denver.
The implication this has for local small business owners is staggering. In the example above, our Remodeler can now tap into highly targeted web traffic for pennies per lead. In my opinion, small business owner who learn the ins and outs of this medium will dominate their markets. (Google AdWords)
Look for more on this topic in the future