sponsored links and pay-per-click advertising
If we don't have pay for sponsored links will our website fail to get results?
In a word - no. Once the new site is built you need to let it settle down and get properly listed. Diving in and bidding for keywords may be a waste of money until you know how well the site can do 'organically'. There is a school of thought that says people tend to ignore sponsored links, instead preferring to look at the first 3 natural results. I agree with this.
How much will it cost?
In highly competitive markets you'll be up against companies with large budgets. In some cases it could cost you hundreds or even thousands of pounds a month to keep a top sponsored position as you have to pay top-rates for keywords. If that generates enough return to justify the cost then it makes sense. In these situations your site does not actually rely on optimising as you are paying for a top ranking. Smaller businesses typically might commit around £200 a month - the trick is to know if this generates the best return. It may be that spending the same amount on banner ads on specialist websites would generate more trade.
There may be justification for small local businesses to pay for sponsored links but it's important to control your budget and not see this form of marketing as your only option. See my 'real world advertising' section for some interesting ideas.
Organic Search Engine Optimisation is the process of getting to the top of the first page of results of non-sponsored links. Net users seem to appreciate a level playing field and perhaps think that top sites are there through their popularity, which is a type of recommendation. Whilst is is true that more and more money is being spent on online advertising it's not all on sponsored links.