Google Adsense is small contextual ads that are published on web sites with the consent of the web site's owner. Publishers create the ads in order to either sell, or create brand awareness. These ads are named Adwords, which is also a program sponsored by Google.
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 is where the term "pay per click" comes from.
This money that Google has received from the Adwords ad creator is then split with the owner of the web site, which is what makes Adsense so beneficial. The size of this percentage split is a secret, but for our calculations we will assume 50%.
Google and the host of the web site split the money paid by the publisher. So if a publisher paid .40 per click for his Adwords ad, then the host of the web site who welcomed Adsense can expect to get .20 and Google gets to keep the other .20 every time someone clicks on the ad that appears on the host's web site. So Google and web site owners are sort of like partners in this.
In the most relevant way possible Adsense is shown. What does this entail? Well, let me give an example that probably illustrates it best. Let's say a website owned by Mary features women's clothing. Ads on clothing or specifically women's clothing can be shown on Mary's web site, if Mary decides to monetize her web site with Google Adsense. If a page of her web site was dedicated to shoes, then the Adsense ads appearing on that page would be for women's shoes.
By what dynamic is price per click determined? The Adwords side of the equation kicks in here. Publishers who create Adwords bid on keywords. When a keyword is more lucrative or sought after, the publisher is willing to pay more for each click. Sometimes a keyword is in excess of $50 per click or sometimes a few cents per click.
Therefore combining a high traffic web site with Google Adsense can result in a very lucrative deal. Many Internet marketers have put sites on the web with specific content, just to attract the high paying Adsense ads. -
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