With the website owner's permission, Google Adsense places ads on the website which are targeted to the site's users. The ads are created by publishers that are selling products and/or creating brand awareness. The ads which have been created belong to another program sponsored by Google, called Adwords.
The two programs of Google Adwords and Adsense run side by side. Google earns revenue from the ad creator if an ad is clicked after a user has performed a search on Google or one of their partner networks. This is described as "pay per click".
The beauty of Adsense lies in the fact that the person who owns or hosts the website that the Adwords ads appear gets to split the money with Google who pays them when they receive it from the creator or publisher of the ad. Nobody really knows what exactly the split is as it is a well guarded secret, but it does vary and let's assume it is 50% for our purposes.
If a publisher is willing to pay .40 per click for his Adwords ad, then Google get .20 and the host of the website that welcomes Adsense can expect go get .20 every time someone clicks on the ad that appears on their website. So essentially, there is a sort of partnership that is developed between the website owners and Google.
In the most relevant way possible Adsense is shown. What does this entail? Well, probably this can be illustrated best through an example. Mary had a website, let's say, featuring women's clothing. Google Adsense once Mary decides to monetize her website can help her to show ads on her website that would be related to clothing or to be more specific, women's clothing. The Adsense ads would be appearing specifically for women's shoes if a page of her website was dedicated to shoes.
So how is the price per click worked out? This is where the Adwords side of the equation kicks in. Keywords are bid on by Adwords publishers. A more sought after keyword will result in the publisher paying more for each click. The value of keywords can be anywhere from a few cents to over $50 for each click.
It doesn't take a genius to see how a popular website with a lot of traffic can make quite a bit of money through Google Adsense. Many Internet marketers have put sites on the web with specific content, just to attract the high paying Adsense ads. -
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