Pay-Per-Click advertising can be geo-targeted to a specific geographic area. Your ad will only appear to those people searching within the targeted geographic area and where your keywords are relevant to the search term. Also, you only pay a bid fee when someone actually clicks on your sponsored link within your ad.

Let's say you bid $1.50 on the keyword "carpet" and geo-targeted "Chicago, IL.". Only people searching for carpet in the Chicago area will see your advertisement. If your ad appeared 1000 times in a day (this is called ad impressions) but only 6 people clicked on your ad you would only pay: 6 x $1.50 = $9.00.