Contextual ads are incorporated into a website after Google Adsense has gained the owner's permission. The ads are designed by publishers for selling and marketing purposes. Adwords, which is a Google sponsored program, is how these ads are referred to.
Google Adwords and Adsense run hand in hand. 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".
The Adsense program allows the owner of the website where the Adwords ads appear to split the amount of money that Google has taken from the creator of the ad. It is not common knowledge exactly what the percentage split is, and it is not always the same, but let's assume for our purposes 50%.
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 basically it is a partnership of sorts between Google and website owners.
The fact that its placement is highly relevant is one of the most attractive qualities of the Adsense program. In what way? This is best illustrated in an example. Imagine a women's clothing website owned by Mary. If the Google Adsense scheme was deployed on Mary's website, the ads would all revolve around clothing, and in particular women's clothing. If a page of her website was dedicated to shoes, then the Adsense ads appearing on that page would be for women's shoes.
So how do we determine the price per click? The Adwords program takes care of this. Adwords publishers bid on keywords. A more sought after keyword will result in the publisher paying more for each click. The range of values for each keyword can be from a few cents to more than $50 per 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 will create web sites with specific content for the sole purpose of attracting high paying Adsense ads. -
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