When you search for something on Google, you will notice that results appear on the right hand side. These are Adwords; they’re sponsored advertisements. If you were to click on one of these, the advertiser would be charged a certain rate for your click. That’s why they’re called pay-per-click ads.
The rate you pay per click is based on the keywords you want your ad to appear for. If someone searches for, say, “internet marketing,” your per-click fee will be much higher than it would be for the keywords “internet marketing in Seattle.” The more competition you have for placing an ad for a certain keyword, the more you will pay for the privilege. And the more generic the keyword is (“internet marketing”) the higher the rate.