You develop the text based ad based on the keywords you believe will help generate traffic to your website. When people go to the search engine and enter certain keywords that match your keywords your ad may appear next to the search results.

The position of your text ad in the results depends on how much you are willing to spend. With google.com you can set a daily limit on the amount you will spend and the amount per click. You only pay when someone clicks on the ad. Although you don't pay for views - only clicks, your ad will be disabled if the ratio of clicks to views is not high enough. You always have the option of changing your ad and the keywords.

With adwords, as with any advertising, you have to gauge whether or not the campaign generates the desired results. Does the campaign result in an increase in traffic? Does that increase in traffic translate to an increase in sales? Online reports are provided giving you the stats for the adwords campaign and you can run multiple campaign at the same time.

You can also set up the campaign so that any click from your adword campaign goes to a designated page on your website. This enables you to provide special offers or discounts to users of specific search engines.

There's no minimum spending level with google.com and they provide keyword traffic and cost estimates so you can make informed decisions about choosing keywords before you get started.