What is Google AdSense?

AdSense is one of two large parts of Google’s advertising system. The other part is called AdWords.

AdSense is the platform that delivers advertisements to websites, YouTube videos, and other Google publishers across the internet. AdWords is the platform that helps advertisers create and publish advertisements on publisher’s websites.

In a more simple sense, AdWords is the platform that takes your money in exchange for advertisements, while AdSense is the platform that gives you money in exchange for hosting advertisements on your website.

Both services are free to join and anybody can sign up.

With AdWords, advertisers pay for each click an advertisement receives. This is called Pay-Per-Click advertising and it’s the most common type of online advertising on the internet today. With AdWords, website owners get paid for each click their advertisement receives.

Basically, an advertiser is paying a website owner to host advertisements on that site while Google is acting as a middle man. Google connects advertisers with relevant websites and takes a cut of the profit.

How can you make money with Google AdSense?

There’s really no limit to how much money you can make with Google AdSense. Some websites make 100+ of 3000+ of dollars per month from advertising revenue, while others make only $4 or $15.

The amount of money you make depends on two things:

  • 1.  The number of clicks your advertisements receive
  • 2.  The Cost Per Click (CPC) of the advertisements

Cost Per Click is the amount you earn for each click. The more clicks you receive and the higher your CPC is, the more money you’re going to make.

CPCs vary widely in value. They depend on the type of advertisements. Legal advertisements and keywords, for example, tend to be worth a lot of money and the CPC can be as high as $10 or more. The vast majority of CPCs aren’t that high and range between 20 cents to $1.00.

Google takes a cut of every click an advertisement receives.  That cut is approximately 32%. If a publisher is paying $1 for each click their advertisement receives, then you will receive 68 cents per click and Google will receive 32 cents.

32 cents may not sound like a lot of money. But multiply that by a few million clicks and you start to understand why Google is one of the world’s most successful and profitable companies.

How does Google choose which advertisements to display?

Google has made an entire business out of putting targeted advertisements in front of web searchers. They have become exceedingly good at it over the years and that’s why many people accuse Google of “stealing your information” or “selling your personal data to advertisers.”

In reality, Google collects information about your search trends and history and uses that data to decide which advertisements you’re most likely to click on.

If you’re an AdSense publisher, then Google primarily uses two things to decide which advertisements to display on your site: keywords and bidding.

Advertisers can bid different amounts for certain keywords. Google chooses the highest bid and puts the advertisement of the highest bidder on your site. At the same time, Google analyzes the keywords on each page to determine if the page is relevant to the advertisement.

Google also takes many other factors – including the quality of the advertisement and your own personal data – into account when displaying advertisements.

Ideally, Google wants its advertisements to appear in the following situation:

  • Someone Googles the keyword “how to fix a computer”
  • Google displays a list of relevant search results and web pages
  • The searcher clicks on one of the relevant results and visits a webpage that explains how to fix a computer. That webpage has AdSense advertisements around the main content. Those advertisements are for PC software that promises to fix, clean, and speed up a PC. The searcher reads the content then decides to click on one of the advertisements Google has chosen to display.
  • Everybody wins in this situation. The searcher solves his or her problem, the website owner makes money from AdSense, the advertiser makes money from software sales, and Google takes a cut of the profit.

Every day, this process is repeated millions of times across the internet.

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