Basics · also called search ad, text ad, sponsored result, paid listing
Sponsored listing
A sponsored listing is a paid search ad that looks like a search result and charges the advertiser when someone clicks it.
A sponsored listing is the product actually being sold in search arbitrage. It is a text ad with a headline, a short description and a link, shown because an advertiser bid on a keyword related to the search. It is labelled "Sponsored" or "Ad" so people can tell it apart from unpaid results.
Listings are sold by auction (ad auction). The advertiser pays only when the listing is clicked, the PPC model. When the click happens on a partner page, the search engine keeps part of the payment and passes the rest down the chain as a revenue share.
For the arbitrageur, a click on a sponsored listing is the only event that earns money: a monetised click. Everything before it, including the ad on social media, the article and the keyword button, exists to bring a person to that point.
The rules around listings are strict. Publishers must not ask people to click them, disguise them, or place them where they will be hit by mistake (accidental click). Any of these counts as generating invalid clicks.
An example
For example, a results page for "boiler repair" shows a listing headed "24-Hour Boiler Repair, Fixed Prices" marked Sponsored. A visitor clicks it, the repair firm is charged, say, $2.00, and part of that flows back to the page's publisher.
Related terms
SERP (search engine results page)
A SERP is the page of results a search engine shows after someone types a query, mixing paid ads with unpaid listings.
Monetised click (paid click)
A monetised click is a click on a sponsored listing from the search feed that an advertiser is charged for and the publisher is paid for.
Ad auction
An ad auction is the instant, automated contest run for each search that decides which advertisers' ads appear, in what order and at what price per click.
PPC (pay per click)
PPC, or pay per click, is an advertising model in which the advertiser pays only when someone clicks the ad, not when it is merely shown.
Ad disclosure
Ad disclosure is the clear labelling of paid content as advertising, so people know when a link or listing is an ad before they click.
Keyword
A keyword is the word or phrase that triggers search ads, either typed by a person or passed to the search feed by a web page.
Sources: Google AdSense Help: AFS Product-Integrated Feature policies