Small contextual ads published on web sites with the consent of the website owner is Google Adsense. The ads are created for selling products and/or creating brand awareness by publishers. Adwords is what these ads are termed and it is a program sponsored by Google.
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".
Now the beauty of Adsense is that the person who owns or hosts the website that the Adwords ads appear on will split the amount of money that Google receives from the creator or publisher of the ad. It is a well guarded secret what the percentage of the split is, and it does vary, but for our purposes let's say it's 50%.
Say the publisher is willing to pay. 40 per click for his Adwords ad, then every time someone clicks on the ad that appears on the host's website that welcomes Adsense can expect to get roughly .20 and the other .20 goes to Google. So basically it is a partnership of sorts between Google and website owners.
In the most relevant way possible Adsense is shown. What does this entail? Well, probably an example would be the best way to illustrate this. Let's say Mary had a website featuring women's clothing. If Mary wanted to monetize her website 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 website was dedicated to shoes.
So how do we calculate how much revenue a click generates? The Adwords program takes care of this. Adwords publishers bid on keywords. If a keyword is particularly sought after, then the publisher will pay more per 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 will create web sites with specific content for the sole purpose of attracting high paying Adsense ads. -
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