Contextual advertising – advertising your site in SERP (for example Google).
Every time someone comes in search of a word by which you advertise (for example “buy iPhone “) he sees your ad on the top of the search results. If this request is touted by many advertisers ads can also show up on the side or bottom of the results page.
All ads are marked yellow in colour and are always displayed on the first page of search results.
Advertising System Google called Google AdWords and operates a system of auction. You set by yourself the maximum price you’re willing to pay per click on your ad (ie conversion price by a site or page that is advertised). In case the visitor clicks on your ad and visits your site the appropriate amount will be deducted from your advertising budget.
The system automatically takes into account the relevance of your ad to the content on your site, to the content of the reaching request, to the price per click and other factors. From all these factors depends how often your ad shows and the click price (for quality ad it can be much lower than the maximum you specified).
Current campaign results (the number of visits, the search requests, etc.), you can revise any time in the Google AdWords admin panel.
Any advertising campaign fees and its budget are determined solely individually.
Those who like a very detailed explanation of the principles of the system can click below to see the info graphic formula and the calculation formula in Google AdWords.
Infographic: How the AdWords auction system works.