Pay per click technique is a charging system that website owners use when they want their advertisers to pay them when internet users see their advert banners on their websites and click on them. The search engine and website owner are not involved in determining how much they are going to charge the advertiser, rather, he makes that decision himself. Google has recorded AdWords as its highest source of revenue and it is used in implementing the PPC technique. It allows banner ads and text advertising to a targeted audience using the pay per click technique. Since all that Google requires of people is the internet and creativity, this technique is now being used in many different parts of the world.

For AdWords, advertisers use two main ways to determine how much they should pay for their advertisements. They can either use a flat rate or one based on bids. In order to decide, the advertiser needs to be aware of the number of visitors that visit that website and the chances of those people also visiting his or her website. One can know this by looking at the audience they are targeting. If an advertiser has the same audience as the website owner, chances of those visitors clicking on the advertisement are much higher. Advertisers also consider the chances of those visitors being converted into sales. If the audiences of both the advertiser and the website owner are the same, there are higher probabilities that they visitors might buy the product being advertised. Looking for search terms internet users type in the query box or the content of pages that they are reading are good ways to determine the type of an audience.

Advertisements that use AdWords are put on Google search engines and also other partnering networks. Based on the results that appear on a results page, AdWords determines the advertisements to post there. Advertisements are designed to fit into certain categories such as what an internet user is looking for, what part of the world they are located and at what time they are on the internet. Many search engines have indicated that people who log in to their internet late at night but for reasons other than work generate much traffic for a website but rarely buy the advertised products. Alternatively, sales conversions are very common with people who log in to the internet late at night specifically looking for a particular product.