For example, if you search for "hawaii vacation homes" you'll see your results in the middle

of the page. These are called organic search results.

The paid results or ads show at the top of the page and down the right side.

You won't see just any ad in the search results.

The idea is to let advertisers tell you about their product when it's related to what you're

searching for. This is great for advertisers and keeps your search results relevant. Here's

how it works:

The advertiser picks key words or phrases that someone might enter when searching for

something similar to their product or service. In this example, those keywords might be things

like

After figuring out which keywords they want to appear next to, the advertiser sets a bid

on each them.

"Bid"? Yep: this is pretty much like an auction - if you really want something, you're willing

to pay more. If it's not something you're so keen on, you might not even bid.

Similarly, advertisers set limits on how much they are willing to pay for a click for each

keyword.

Once they have their keywords and their bidding strategy, they create a text ad like this.

The advertiser then enters into an auction with other advertisers who also want their

ads to show on the same search terms.

To win the auction, the advertiser's bid and the relevance of their ad are taken into consideration.

The advertiser with the best combination will show in the top spot, the second in the next,

and so on.

Really, search is pretty exciting. Each and every time there's a search, there's a real-time

bidding war happening for that ad space.

So the next time you click on a search ad, pat yourself on the back. You just made someone

a winner.