What is AdWords?
Internet Marketing Dictionary | Google AdWords

AdWords is the name of Google's Pay Per Click (PPC) advertising system. It revolutionised the commercial nature of the Internet because, although not the first PPC program, it was implemented far better than its competitors such as Overture. Furthermore it was able to build on the growing market penetration of Google's search engine.

From a commercial perspective AdWords enabled businesses to buy targeted traffic to their websites instantly. It therefore opened up the commercial capapability if the web. No longer did businesses build websites and then sit patiently by waiting for traffic to arrive.

The AdWords system has evolved to become very complex but it does give you the ability to enter new markets in literally a few minutes which is something that businesses prior to the Internet and PPC advertising was just not possible.

For example you could decide to enter the market for bicycles in Fiji at 10 o'clock one morning, put up a website by 10:30 and start an advertising campaign on AdWords at 10:40. By using AdWords' geotargeting capabilitites you could restrict your ads so that they were only seen by people in Fiji.

If someone in Fiji searched for bicycle stores or just bicycles they would see your ad. If they clicked on it you would pay for the click and the searcher would be taken to your website.

Introduction to Advertising on Google