With the site owner's permission, Google Adsense places ads on the site which are targeted to the site's users. Once publishers have created the ads, they are used to both sell products and create brand awareness. The ads that are created are called Adwords and they are also a Google sponsored program.
Google Adwords and Adsense go together hand in hand. Every time someone clicks on a sponsored ad after they have done a search on Google or one of their partner networks, Google gets paid a predetermined price by the person who created the ad. 'Pay per click' is the term that was coined for this.
Now the beauty of Adsense is that the person who owns or hosts the site that the Adwords ads appear on will split the amount of money that Google receives from the creator or publisher of the ad. The percentage of the split does very and it is a well guarded secret what the percentage of the split it, but let's say it's 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 site that welcomes Adsense can expect go get .20 every time someone clicks on the ad that appears on their site. So Google and site owners are sort of like partners in this.
The fact that its placement is highly relevant is one of the most attractive qualities of the Adsense program. How so? This is best illustrated in an example. Imagine a women's clothing site owned by Mary. If the Google Adsense scheme was deployed on Mary's site, the ads would all revolve around clothing, and in particular women's clothing. If a page of her site was dedicated to shoes, then the Adsense ads appearing on that page would be for women's shoes.
So how is the price per click determined? The Adwords program takes care of this. Adwords publishers bid on keywords. The more lucrative or sought after a keyword is, the more the publisher will be willing to pay for each click. The range of values for each keyword can be from a few cents to more than $50 per click.
It is easy to see how someone with a high traffic site can generate quite a bit of revenue by teaming up with 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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