What is Google AdSense? Google AdSense is an ad-serving program that places ads that “make sense” – specifically, that make sense based on relevant content, and assumptions about who might be interested in that content. AdSense is an application of the broader concept of Contextual Marketing. Contextual Marketing is just what it sounds like. On a website about custom cars, you might have an ad for fancy wheels or car care kits. On a website about off-roading, you might have an ad for durable truck tires or spotlight rigs. A hockey site might advertise hockey sticks…and a tennis site, tennis shoes. Contextual Marketing just means aligning the ad serving with the context/nature of the website and its audience, the same way like items are grouped in a store. And the “context” can be cut much finer than website level, it can be page level, article level, and so on, so the ads always match the material they are appearing near, and thus, appeal to the interest of the reader/buyer at any given moment. So what’s in it for you – the website publisher/owner? That’s easy. Every time a visitor to your site clicks one of these ads, you make money. The better the ads are targeted, the more clicks you get, the more money you make. AdSense displays easy-to-read, text-based, relevant ads that don’t overshadow the content of your website or annoy visitors. Actually, you have seen hundreds of these ads yourself, as you’ll realize in a moment. Today there are probably only a few places in your website that can directly make you money, if any. The magic of Google AdSense is this: It allows you to earn money through every page of your website. On top of that, with algorithms used to align ad content with page content Google automatically selects and displays ads for your website that are likely to generate the highest revenue for you. Google AdWords If you have ever searched on Google, you have seen AdWords. Google AdWords are the small text ads that are displayed on the side of the search results in Google. These ads are contextual of course – in this case the context is the search terms you entered. The ads will be served based on what you’re looking for. So, if you do a search on “printing services” you will get ads for printing services along with your search results! How does this generate money for Google and the advertisers? Google AdWords works on a model known as pay-per-click. When someone clicks on an AdWords ad, the advertiser of that ad has to pay Google a certain amount. It’s easy to track and fully automated. We say “certain amount” because that amount is different all the time and is subject to market forces – in this case, bidding. Something has to determine the placement of those ads, and what determines it is how much the advertiser offers to pay per click. When you submit this kind of ad to Google, you submit it with a bid – which is compared to other bids for similar keywords. It’s an auction style process. The position of the AdWords ads is based on the bidding amount of keywords of an ad. Obviously, the higher the bid, the higher the position the bid buys you. For instance, if the highest bid for the keywords “Internet marketing” is 80 cents per click, you can get top position by bidding 90 cents. Then every time someone clicks on your ad, Google would charge you 90 cents, and you would retain the top position until someone else bids more for the same search word placement. How the Ads Get On Your Site Once you join the AdSense program – and Google approves your site or sites, which we’ll cover in detail shortly – the actual process of displaying ads on your website is extremely simple. You are provided with a small HTML script, which you can paste anywhere on your webpage. You may paste this code any number of times and on multiple pages, and watch the ads get served! Google automatically places AdWords ads that are most relevant, from its extensive advertiser base. Google employs various sophisticated algorithms to determine the relevancy of the ads to your content.