Google Adsense is small contextual ads that are published on web sites with the consent of the website's owner. 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 are very closely linked. 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 has become known as "pay per click".
Where Adsense comes into its own, is that the website owner or host receives a portion of the money that Google has received from the creator of the Adwords ad. Although the percentage split is a well guarded secret, for our purposes we can work on 50%.
The host of the website that displays the Adsense ad can receive .20 when that ad is clicked, if the publisher is paying .40 in total for the Adwords ad. Google keeps the remaining .20. So in effect, this is a partnership between the website owners and Google.
Adsense displays itself with high relevance. How is this achieved? This is best illustrated in an example. Mary hosts a website dedicated to women's clothing. If the Google Adsense scheme was deployed on Mary's website, the ads would all revolve around clothing, and in particular women's clothing. An Adsense ad appearing on a particular page dedicated to shoes would also focus on shoes.
So how do we calculate how much revenue a click generates? This is where the Adwords side of the equation kicks in. Adwords publishers place bids on various 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.
Anyone with a website that generates a decent amount of traffic can make some nice money by putting Google Adsense on their website, you don't need rocket science to understand that. Specific content is created by Internet marketers with the sole purpose of attracting high paying Adsense ads. -
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