With the consent of the web site owner, small contextual ads called as Google Adsense are published on their sites. The ads are created by publishers that are selling products and/or creating brand awareness. The ads that are created are called Adwords which is a Google sponsored program.
The two programs of Google Adwords and Adsense run side by side. Whenever an ad is clicked by a user performing a search on Google or one of their partner networks, the ad creator pays an amount of money to Google. This is described as "pay per click".
Now the beauty of Adsense is that the person who owns or hosts the web site that the Adwords ads appear on will split the amount of money that Google receives from the creator or publisher of the ad. 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. Google and the web site owners can therefore be considered partners.
Adsense is shown in the most appropriate manner possible. What does this indicate? Well, let me give an example that probably illustrates it best. Mary had a web site, let's say, featuring women's clothing. If Mary wanted to monetize her web site with Google Adsense the ads that would be shown would all be related to clothing, and more precisely, women's clothing. The Adsense ads would be appearing specifically for women's shoes if a page of her web site was dedicated to shoes.
So what determines the price per click? What comes in here is the Adwords side of the equation. The keywords are bid on by publishers of Adwords. The publisher will pay more per click depending upon how lucrative or sought after the keyword is. Keywords range anywhere from a few cents to in excess of $50 per click.
Therefore combining a high traffic web site with Google Adsense can result in a very lucrative deal. Several Internet marketers will actually create specifically focused websites in order to attract lucrative Adsense ads. -
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