With the consent of the web site owner, small contextual ads called as Google Adsense are published on their sites. When selling products and/or creating brand awareness, publishers can create the ads. The ads that are created are called Adwords and they are also a Google sponsored program.
Google Adwords and Adsense are very closely linked. Every time someone does a search on Google or one of their partner networks and clicks on one of the sponsored ads, then the person who created that ad will pay Google a predetermined price. This has become known as "pay per click".
Google has to split the money they receive from the creator or publisher of the ad with the person who owns or hosts the web site that the Adwords ads appear and that is the uniqueness of Adsense. For our purposes, let's assume the split is 50%, but it is a well guarded secret what exactly the percentage of the split is, but it does vary.
If a publisher is willing to pay .40 per click for his Adwords ad, then the host of the website that welcomes Adsense can expect to see roughly .20 every time someone clicks on that ad that appears on their web site. Google keeps the remaining .20. So basically it is a partnership of sorts between Google and web site owners.
The Adsense program displays itself in a highly relevant way. How is this achieved? An example will help in illustrating this. Imagine a women's clothing web site owned by Mary. If the Google Adsense scheme was deployed on Mary's web site, the ads would all revolve around clothing, and in particular women's clothing. If she had a page devoted to shoes, then any Adsense ad on that page would be for women's shoes.
By what dynamic is price per click determined? The Adwords side of the equation kicks in here. Adwords publishers bid on keywords. The publisher will be willing to pay more for each click if the keyword is more lucrative or sought after. Keywords range anywhere from a few cents to in excess of $50 per click.
Anyone with a web site that generates a decent amount of traffic can make some nice money by putting Google Adsense on their web site, you don't need rocket science to understand that. Many Internet marketers will create web sites with specific content for the sole purpose of attracting high paying Adsense ads. -
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