With the site owner's permission, Google Adsense places ads on the site which are targeted to the site's users. The ads are created by publishers that are selling products and/or creating brand awareness. These ads are named Adwords, which is also a program sponsored by Google.
Google Adwords and Adsense run hand in hand. 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 is how the phrase "pay per click" originates.
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 size of this percentage split is a secret, but for our calculations we will assume 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 site that welcomes Adsense can expect to get roughly .20 and the other .20 goes to Google. So essentially, there is a sort of partnership that is developed between the site owners and Google.
Adsense is shown in the most relevant way possible. What does this mean? 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. An Adsense ad appearing on a particular page dedicated to shoes would also focus on shoes.
So how is the price per click worked out? This calculation is taken care of by the Adwords scheme. Adwords publishers place bids on various keywords. A more sought after keyword will result in the publisher paying more for each click. The value of keywords can be anywhere from a few cents to over $50 for each 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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