The term “sponsored link” can have two different meanings in online marketing. On the one hand, sponsored links are paid listings in search engine results pages. On the other hand, references to other websites are referred to as “sponsored links” via a link. In either case, it is important that the linking page is marked as a paid link. Sometimes, sponsored links are referred to as partner links.
Search engines usually offer advertisers ad placements within the search results lists (SERPs). These are sponsored links. You can link a complete ad or a URL within a text ad. Sponsored links are placed by search engines as triggered by keywords that the advertiser specifies as part of their booking. If a user now enters such a keyword in the search bar of the search engine, the ad created by the advertiser will be displayed. If a user clicks that ad, the advertiser pays a certain amount. The click rate usually depends on how many other advertisers want to advertise ads for this search term or keyword.
This form of sponsored links can be used by webmasters within the framework of search engine marketing (SEA), in order to generate specific traffic for a website or a particular landing page. In most cases, advertisers pay in the form of pay-per-click (PPC), which is why these are also called PPC campaigns.
Sponsored links are marked as advertisements within the SERPs.
At the end of the 1990s, the first search engines enabled private users to browse parts of the Internet. Since the provision of computing power devours a lot of financial resources for the immense amount of data collected for web searches, search engine providers seized the opportunity to monetize their services early on. For example, Google started to offer sponsored links through the Google AdWords program to paying customers just one year after its launch. Today, the advertising program is still the key source of revenue for the Alphabet Group, which has become the parent company of Google. Other search engines, such as Bing and Yahoo, offer similar services and use sponsored links as a source of revenue.
Search engines such as Google, now offer users a variety of sponsored links and thus opportunities for search engine advertisement. The Google AdWords program, for example, allows you to place ads on the video platform YouTube, Google Shopping Ads, text ads, or display ads on the Google AdSense participating websites. In all cases the paid links are marked and recognizable for users as such.
Not only search engines search for possible revenue through sponsored links, websites do too. They utilize programs such as Google AdSense to include sponsored links on their own websites and earn money per click on such a link.
Some website operators offer sponsored link services on their own initiative. Many publisher websites frequently maintain their own advertising networks in which customers can place sponsored links. This form of paid linking also has to be marked as such.
For website operators, it is important to label paid links as advertisement. By emphasizing that the link is paid, they avoid the possibility of an article being penalized on their website. In most cases, the link itself is not marked as a sponsored link, but it is pointed out at the beginning or at the end of an article that it is a paid post. In this case, the terms “sponsored post” and “sponsored link” have an almost identical meaning, even if they are two different versions.
For search engines, each link is a kind of recommendation of a website. At the same time, linking can raise the trust level of a website and improve its ranking. However, the Google or Bing Webmaster Guidelines specify that backlinks need to be set voluntarily. Any form of unnatural linking can result in a penalty or, in the worst case, to an exclusion from the search engine index.
In this case, webmasters should label paid links as such or note it as a paid post. On the other hand, they should devalue these links for search engines and indicate that crawlers should not follow them. To avoid a penalty through sponsored links, Google recommends giving these links the rel=nofollow attribute. 
Sponsored links can also be used as part of affiliate marketing. In this case, it gets paid for based on the number of clicks, agreed conversions or leads. Affiliate links must also be marked as an advertisement.
With sponsored links, marketers have the opportunity to significantly increase the brand reach of a website or brand. By booking sponsored links in search engines or websites with great reach, more traffic can be directed to their own website. You can also use sponsored links to test the effectiveness of a landing page through paid traffic.
According to Google employee, Johannes Müller, Google can now identify whether a paid link is an exception or not. For example, the search engine checks whether or not the link has been intentionally set. Google’s webspam team would ultimately devalue such links, so that no PageRank and thus Linkpower will be passed on.
Webmasters should, however, not then neglect to mark paid links with a nofollow attribute. After all, in addition to devaluing the link, Google can also classify it as webspam and devalue the target page.