Search Engines like Google and Bing use this model where the advertiser bids on keyword phrases that are relevant to their target market and pay when ads are clicked.
Those ads are typically text-based search ads. They are always positioned above the organic results at the top of the page (or at the bottom of it), increasing thus the potential Click Through Rate (CTR).
For e-commerce solutions, advertisers can do shopping ads which are a combination of images and text, where you can feed & advertise products dynamically to Google via Google Merchant Center.
Overall, PPC is an excellent method of delivering quality traffic to your website quickly. Through Google Ads you can acquire business intelligence for your target market & competition