When you do a search on Google, those ads you see at the top and sides are Google AdWords ads.
Advertising on Google AdWords is fairly simple. It's very expensive, but it's the only real way to get a significant number of visitors to a business site. A business site is never going to rank well in the regular Google results.
In AdWords, you write short ads. Here's an example:
You then choose some "keywords" to connect the ad to. "buy hats" and "fancy hats" might be appropriate here.
Whenever someone searches for "buy hats" or "fancy hats" in Google, your ad will show up at the right of the screen. That person might then decide to click on your ad, and be taken to your website. You then pay Google some amount (usually 5c - $1). What you choose to pay per click is up to you. However, the more you pay (and the more people click on your ad), the higher up the page Google will put your ad. So, if you want more visitors, you need to pay more for each visitor.
You can choose who you want your ads shown to, based on geographical location. This is especially useful for local businesses.
The basic strategy with AdWords (or any advertising system) is to make more from the visitors who come to your site, than you paid to get them there.
You pay 20c each, for 100 visitors. That's $20 spent.
On average, for every hundred visitors that come to your website, you sell one hat, which makes you $35 profit.
After factoring in AdWords, you make $15 profit.
However, in reality, it's just not that easy. Here's where you need to put your business hat on.
You're now competing against other shrewd businesspeople, all vying for their ads to be shown. They're prepared to pay a lot of money to Google for each click on their ad, because they make a lot of money from each visitor to their site. To compete with these people, you need to be offering a really good product, and your site needs to entice the visitor to want to buy that product. You also need to be rewriting your ads, and thinking of new keywords. You can't just sit back and watch. You need to start optimising and improving this whole Keywords - Ads - Website - Product chain.
FatCow gives you a free $75 AdWords voucher when you sign up with them.