You create ads and choose keywords, which are words or phrases related to your business. Keywords are the phrases that people search for on Google e.g. "plasma television".

The cost per click is then dependent upon a combination of the popularity of the keyword and where you want your ad to appear i.e. first page, within the first five, etc.

Set your ads to appear only to people searching in a particular region. Now it is easy to target online customers within, say, 25 miles of your front door.