How Online Advertising Works
Although SEM refers to placing ads just on search engines, online advertising as a whole is much broader. The possibilities of online advertising include placing ads on nearly any type of website or page a user might browse, such as news, blogs, reviews, entertainment, online magazines, and marketplaces. In AdWords, these other sites make up the Google Content Network.
Ads on the Google Content Network can be in a number of formats, such as basic text ads, graphical image ads in a variety of sizes, audio streams, or interactive and video ads. You can also choose many different targeting options for your ads: whether defining the user’s device (a computer or a mobile phone) you’d like your ad to show on, or specifying the user’s location, language, or demographic.
Online advertising offers so many options that it’s useful to define your advertising goals before beginning. This can help you determine where to place ads (search engines, content pages, or both) and what format of ads to place, and also help guide your budgeting decisions.
Article Courtesy of Google (https://adwords.google.com/support/aw/bin/static.py?hl=en&guide=23303&page=guide.cs)