Understanding Google AdSense
The AdSense Factor
Google describes AdSense as “a fast and easy way for web site publishers of all sizes to display relevant Google ads on their web site’s content pages and earn money.” The AdSense ads displayed by Google on your site are matched to Google’s interpretation of the content theme of your site. In this manner, the AdSense ads will be of interest to your site visitors looking for the unique content your site offers to them.
AdSense is a system where Google places its AdWords ads on the content pages of non-Google web sites. It is a pay-per-click (PPC) service where webmasters are paid a portion of the revenue collected by Google from the advertisers. The advertiser pays Google a pre-determined amount each time a web site visitor clicks on an AdSense advertisement.
AdWords is the Source of AdSense Income
AdWords ads are the source of all the AdSense income you are able to generate. As a result, you need to fully understand the AdWords system in order to appreciate how the AdSense system works.
Google describes AdWords as “a quick and simple way to purchase highly targeted cost-per-click (CPC) advertising, regardless of your budget.” These paid ads (sponsored links) are displayed by Google on the search engine results page along with the non-paid (natural results) for a given keyword search.
AdWords Ranking
Google will rank an AdWords ad based on the maximum CPC, the click through rate (CTR) and the relevancy of the ad text. Google prefers relevant and well-targeted AdWords ads. Google determines ad placement using the value formula: CPC x CTR. The ad is placed higher as the valuation rises. It’s possible for an advertiser to have a high rank position with a low CPC if the CTR makes the value to Google higher than other ads with a higher CPC.
AdSense Program
You need to apply and be accepted by Google before you can display the AdSense ads on your web site. They are very particular about the sites that are eligible and accepted. Google’s name is on the ads and they cannot risk hurting the perceived value of the AdSense and AdWords programs.
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