Among the tools of Internet marketing, pay-per-click advertising is perhaps the most straightforward way for a Web site owner to earn from his site. Every time a visitor clicks on the pay-per-click ad, the web site owner earns a little something. It's as simple as that.

That's also the main reason why many advertisers would rather have a pay-per-click ad than a banner ad in their Internet marketing campaigns, Banner ads, also known as Web banners, are those flashing, rectangular boxed ads that are usually positioned at the top of leading Web sites. In pay-per-click advertising, the advertiser pays the Web site which carries the ad only when someone clicks on it. In banner advertising, the advertiser pays the Web site which carries the ad regardless of whether anyone clicks on it or not. This makes pay-per-click advertising the more results-oriented Internet marketing technique because it delivers guaranteed results.

Pay-per-click search engines are another effective Internet marketing tool. Advertisers bid on keywords that Internet users are likely to use when doing a Web search for their products or services. The search engine will insert the advertiser’s ad at the top of search engine results every time someone does a search for the purchased keywords. In other words, the search engine will present the ads as "suggested sites" to those doing the keyword search.

The ads are placed atop the natural search engine listings and arranged according to size of the advertisers' bids, with those with the highest bids occupying the most visible positions on the page. Like pay-per-click advertising, advertisers only pay the search engine when someone clicks on their ads.

To illustrate, let's say you're a manufacturer of letter envelopes. You then bid on the words "letter envelopes" because you feel that's what a consumer is likely to type when doing a Web search for your product. When the search engine shows it's natural search listings, your ad will appear on top of these search results with the label "sponsored ads" or "sponsored links." When a consumer clicks on your ad, he is brought to your Web site. This is another Internet marketing technique that delivers quantifiable results.

The amount of the bid determines the placement of the advertiser's ad in the search engine results. Those who bid the highest will have their ad positioned first on the list of results. The advertiser with the second highest bid is listed second and so on. After all the advertisers' ads have been displayed, the natural search results follow.

As an Internet marketing tool, pay-per-click search engines are a cost-effective option. The cost of a pay-per-click ad would depend on the popularity of the Web site or search engine that will carry the ad. Prices will generally costs between US$0.01 to a US$0.50 per click. In some cases where specialized products are involved, say, unsecured natural loans, prices can be as high as £18+ per click.

The best search engines for Internet marketing of this nature are Google AdWords and, Yahoo! Search Marketing.

Internet marketing on search engines, more popularly known as search engine marketing or SEM, refers to those marketing methods aimed at making a Web site more visible on search engines. There are three basic methods of SEM: search engine optimization, pay per click advertising and paid inclusion.

1. 1. Search engine optimization
   Also known as SEO, this refers to those methods aimed at improving a Web site's structure, content, and backlink count. It gives a Web site's keywords more relevance when a search is made for these keywords and strengthens the Web site's ranking in search engine results. SEO is a very popular and effective Internet marketing technique.
2. Pay per click advertising
   This method involves a bidding on keywords by advertisers. If you place a bid, a search engine will insert your ads at the top of search engine results every time someone does a search for the keywords you bid on. In other words, the search engine will present your ads as "suggested sites" to those doing the keyword search.
   
   The ads are placed atop the natural search engine listings, and they are arranged according to the advertisers' bids, with those with the highest bids being placed at the uppermost portion of search engine results. It's called "pay per click" because the advertisers pay the search engine every time someone clicks the advertisers' ad.
3. Paid inclusion
   This method is similar to pay per click advertising except that, instead of placing an advertiser's ad on top of the natural search engine listings, the search engine includes the advertiser's Web site among the search results. This makes it appear like the advertiser's Web site is among the natural listings.
   
   The credibility of paid inclusion as an Internet marketing technique has received widespread criticism. In response, search engines such as Google ceased to offer this Internet marketing service in 2006.

By far, search engine optimization is the most widely-practiced among the Internet marketing techniques above. By re-designing a Web site to make its pages easier for search engines to find, SEO not only makes the site search engine-friendly, it also improves the site's overall aesthetics and its Internet marketing appeal. With the help of SEO, a site has a strong chance of landing within a search engine's top 10 results.

Internet marketing is also concerned with a site's choice of words and their placement, and SEO bolsters the site’s standing in this regard through the use of both visible and hidden meta tags. For the uninitiated, meta tags are HTML tags that contain information about the Web pages, including the name of the author, its subject matter, when it was created and last updated, etc.

Overall, there are two basic Internet marketing techniques for optimizing a Web site: (1) improving design and content to improve search engine results, and (2) spamdexing, which is stuffing the Web site with the key words. Try to avoid the latter.

In a nutshell, Internet marketing is simply the practice of selling one's products and services online. It has its own set of tools and techniques, the most popular of which are search engine marketing and search engine optimization. There are also advertising-related Internet marketing tools such as banner ads, interactive advertising and pay per click advertising as well as content-related techniques such as blogging, blog marketing and articles marketing. Practices such as affiliate marketing, e-mail marketing, online freelancing and the like are also considered Internet marketing tools.

Aside from its role in e-commerce, Internet marketing also plays a vital role in other business-related endeavors such as customer service, information management, public relations and sales. With the continuous growth of the Internet every year, Internet marketing has experienced its own proportional growth, both in usage, popularity, availability, and importance.

During the Internet's infancy when the Web was dominated by simple text-based sites, Internet marketing was already in existence, characterized by the simple practice of disseminating product information. These days, Internet marketing has gone way beyond simply distributing information and now involves peddling business models, advertising space, software programs and countless products and services.

In terms of target audience, there are two basic models of Internet marketing: B2B or business-to-business and B2C or business-to-consumer. In B2B, companies direct their Internet marketing efforts to other companies. In B2C, companies try to sell their wares to consumers. B2C is the older of the two practices, while the more complex B2B model soon followed.

There also a third and more recent Internet marketing model known as P2P or peer-to-peer, and it's getting more and more popular every day. In P2P, individuals conduct their business with other individuals. An example is the practice of sharing files on sites like Kazaa.

Internet marketing can be practiced using different formats. For instance, on sites such as Priceline.com, customers can name their price for goods that they want. They start by giving a range of the prices they're willing to pay and the site gives a list of things that they can by for that amount. Meanwhile, other Web sites such as Hotwire.com allow customers to compare the prices of products so that they can get the best price. There are also the so-called auction sites like Ebay.com that allow prospective customers to bid for a host of products.

Estimates indicate that over one-third of US consumers already use the Internet to make purchases. What this tells business owners is that, if they're competitors are already operating on the Internet, they should hop on the Internet marketing bandwagon as well.

The Internet is especially useful for small and medium-size companies because it lets them promote their products and services using only a relatively small marketing and advertising budget. For example, you don't need a large sales force to sell your product on the Internet. Through Internet marketing, you can sell your products online and, in the process, spend only a fraction of the cost of advertising in traditional media outlets such as TV, radio and print.