In simple terms PPC is buying traffic from Search Engines. For example, wherever you see the term 'Sponsored Results' on a Search Engine, the Sponsored Results actually come from an advertising network (e.g. Google AdWords, Yahoo Search Marketing). You only pay for users that click through your listing and arrive at your site.
However without proper management a Adwords campaign can be ineffective and costly.
The advantage of running this campaign is you are guaranteed to be on the first page of Search Engines untill the budget you have selected runs out.
Ads are positioned on search and content pages based on their Ad Rank. The ad with the highest Ad Rank appears in the first position, and so on down the page.
Ad Rank = CPC bid × Quality Score
The criteria determining Ad Rank differ for your keyword-targeted ads depending on whether they're appearing on the search network or on the content network.
A keyword-targeted ad is ranked on a search result page based on the matched keyword's cost-per-click (CPC) bid* and Quality Score. Your quality score and CPC bid has to be good for a better Ad Rank.
Quality Score is a dynamic variable assigned to each of your keywords. It's calculated using a variety of factors and measures how relevant your keyword is to your ad text and to a user's search query. Quality Score influences your ads' position on Google and the Google Network. It also partly determines your keywords' minimum bids. In general, the higher your Quality Score, the better your ad position and the lower your minimum bids.