AdSense is an Net advertising method run by Google. It's the flipside of
the two-headed Google advertising coin. Advertisers sign up to Google's
AdWords program & use the method to generate an advertisement. That advertisement is usually a
short text commercial, like a classified, that includes a headline, short
lines of text as well as a link to a Web page. It might even be in a rich media format
such as graphic picture or a video.
Usually, the ad looks something like this:
The advertiser sets a monthly budget and decides the maximum amount that
they're willing to pay each time someone clicks on their ad. If no one clicks
on their ads, they don't pay.
The advertisers though don’t usually choose the sites that those ads are
going to appear on. It’s an option, but most advertisers don’t take it,
preferring instead to influence placement generally through the use of
keywords and bid price.
They depend on Google to look at all the relevant sites in its AdWords
content network and pick which are the best sites to run their ads.
That's where AdSense, the other side of the coin, comes in to play. Publishers
sign up to AdSense and get a code that they paste onto their Web pages.
That code communicates with the Publisher's account to show the type of commercial
they have selected to display, filters out the ads they don't require to display, and
an alllows AdSense to keep track of impressions, clicks and earnings, among
other things.
But the most important task that the AdSense code does is to tell the
AdSense system to place an ad in that spot.
AdSense takes the ads that it's received from AdWords' advertisers, &
distributes them among the publishers & sites that have signed up to
AdSense. Google is secretive about the number of publishers that
AdSense serves but in a weblog post in 2010, the company mentioned a figure
of over a million. Think about each publisher has multiple pages & sites,
& that's lots of places to serve those ads.
What makes AdSense really special though isn’t just its size — which helps
make it attractive to advertisers. It’s the matching technology.
Google matches its AdWords ads to its AdSense publishers through a
combination of different criteria. The keywords the advertiser has included with their ads will be criterion. AdSense "reads" each Web page in its
content network " the pages that carryover AdSense's code " and matches the
keywords on those pages with the keywords supplied by AdWords'
advertisers. It also matches the ads to the keywords entered in to the Google
search engine, posting the ads next to the search results.
User behavior is another criterion. A page about astronomy, for example,
could show ads for books & telescopes but if AdSense can see that the last
sites the user visited were about astrology, then it might offer an ad for
astrology charts as well.
And cost will be a factor, . AdSense multiplies the maximum cost-per click
set by the advertiser with a score based on the ad's click rate to
select the order in which ads appear in a unit &, in part, on which sites
they appear.
Exactly how AdSense makes all these calculations is complex stuff, &
Google doesn't describe exactly the way it does everything. As we'll see, it is
feasible to influence the ads that appear on your Web pages '' it's
important to make use of that influence " but for now imagine AdWords as a funnel
in to which advertisers pour their ads, & AdSense as the tube through
which Google directs the flow outwards onto Web pages.
Once the ads are on the site, Google charges the advertiser for each click an
advertisement receives. The company passes 68 percent of that revenue to the
publisher, keeping 32 percent for itself.
The calculations used to distribute the ads might be complex but the principle
is simple enough. And it works. In the third quarter of 2010, Google reported
revenues from AdSense alone of $2.2 billion — 30 percent of the company’s
total revenues.That means that just in July, August and September of 2010, Google paid out
to its website publishers a total of $1.5 billion.
Clearly, not all of those publishers are making a lot of money. But many are.
Google doesn’t cap the amounts that it can pay its publishers so those
publishers who know how to optimize their AdSense units, produce content
that people want to read or use and bring in visitors can end up holding giant
checks.
Back in 2006, Markus Frind, owner of PlentyofFish.com, a free dating site,
showed off a check that he'd received from Google for $901,733.85. That
check represented months' income.
