A process by which you arrange for your web site to be placed in a pre-defined position within the search engines. Many companies use this method to market their sites because of the delay that exists with search engine indexing.
By using this service, you can obtain a high ranking in specific engines by outbidding other users. The problem with pay-for-placement is that your site is not optimized based on its content. You have to pay your set bid amount every time a user clicks through to your site from the engine. This can end up eating away at your marketing dollars, hampering your return on investment.
On the other hand, through Search Engine Optimization, your site is optimized to rank high within the search engines for content relevant searches. Once optimized in this manner, ongoing traffic is free, giving you a much stronger ROI over the pay-for-placement strategy.