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. 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 what is known as 'pay per click.'
Where Adsense comes into its own, is that the site owner or host receives a portion of the money that Google has received from the creator of the Adwords ad. It is not common knowledge exactly what the percentage split is, and it is not always the same, but let's assume for our purposes 50%.
If the ad creator is fine to pay .40 per click for his Adwords ad, then the website host who has joined the Adsense scheme can expect to receive approximately .20 when the ad is clicked. Google keeps the remaining .20. This indicates how the site owners and Google are partners in this scheme.
Adsense displays itself with high relevance. How is this achieved? The easiest way to see this is by looking at an example. Mary has a site featuring women's clothing. 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 she had a page devoted to shoes, then any Adsense ad on that page would be for women's shoes.
So how is the price per click worked out? This is where the Adwords side of the equation kicks in. Keywords are bid on by Adwords publishers. The amount that the publisher will pay per click is dependent on the value of the keyword. 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 site 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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