Saturday, October 8, 2011

What is Google Adsense?

Adsense is an advertising program run by Google that allows the businesses to run their advertisements on the websites of the publishers who participate in the program. Website owners can enroll in the Adsense program and opt to display the text, image and video ads on their websites that are related to the content of their websites. Google takes care of administering their ads and generate revenue for the publishers on either a per-click or per-thousand-impressions basis.
Google utilizes its search technology to serve ads based on website content, the user's geographical location, and other factors. Those wanting to advertise with Google's targeted ad system may sign up through AdWords. AdSense has become a popular method of placing advertising on a website because the ads are less intrusive than most banners, and the content of the ads is often relevant to the website. When a user clicks on any of the Ads displayed on the publishers website, Google shares a certain percentage of the cost that the Advertiser pays for that click with the publisher.
Currently, the AdSense uses JavaScript code to incorporate the advertisements into a participating site. If it is included on a site which has not yet been crawled by the Mediabot, it will temporarily display advertisements for charitable causes known as public service announcements (PSAs). Optionally the publisher can choose to diplay ads from a differnet webiste or simply to show a solid color if he don't want PSAs to show on his site.
Many websites and blogs use AdSense to monetize their content and this caused the creation of millions of niche based websites that focus on a specific niche and attract the visitors and ads related to that niche.
Web masters use several ways to monitise their websites and blogs. Some of them are:
  • They use a wide range of traffic generating techniques including but not limited to online advertising.
  • They build valuable content on their sites which attracts AdSense ads which pay out the most when they get clicked.
  • They use various techniques on their websites that encourage clicks on ads. However, Google prohibits people from using phrases like "Click on my AdSense ads" to increase click rates. Phrases accepted are "Sponsored Links" and "Advertisements".
The source of all AdSense income is the AdWords program which in turn has a complex pricing model based on a Vickrey second price auction, in that it commands an advertiser to submit a sealed bid (not observable by competitors). Additionally, for any given click received, advertisers only pay one bid increment above the second-highest bid.
                                 
                                    Adsense example


Adsense for Search
Adsense for Search is a companion to the regular AdSense program, that allows website owners to place Google search boxes on their pages. When a user searches the web or the site with the search box, Google shares any ad revenue it makes from those searches with the site owner. However, only if the ads on the page are clicked, the publisher is paid. Adsense does not pay publishers for mere searches.

                  Adsense for search example
 
How Google Adsense Works?
Google Adsense advertising system invloves three different kinds of people:
Advertisers: Advertisers use Google Adwords program to advertise their Ads not only on the Google Search results, but also on the content pages of the external websites and blogs that participate in Google Adsense Program. They do this on either PPC (Pay-Per-Click) or CPM (Pay-Per-Thousand Impressions) basis. Advertisers can optionally select which websites they want their Ads to show on. 

  • Publishers or Web site owners: Website owners and Blog owners participate in Google Adsense using which they place the Ads served by Google on their content web pages. They do this by placing a Javascript provided by Google on their webpages or blogs. Website owners has the option to choose various formats, colors and a whole lot of customization options using which they can control and blend the Ads according to the look of their websites. Google Adsense program also provides various performance monitoring options (such as channels) for website owners to track and maximise the performance of Ads on their web sites.
  •  
Website Visitors: When a visitor visits a Google Adsense Particepant's website, they see relavent Ads along side the content. If the visitor clicks on any of these Ads, Google shares an undisclosed percentage of the cost of that click with the website owner.
Hence this is how we can summarise the process of how Adsense Program works:
  1. The website owner signs in to the program.
  2. Ads are placed on the website according to:
    • AdSense™'s contextual selection and filtering criteria
    • the publisher's options (the publisher gets to filter ads)
    • the advertiser's option, in the case of impressions-based advertising (the advertiser can choose from a number of available sites)
  3. The publisher receives an undisclosed share of the revenue from the ads. 
AdSense is based on the PPC and CPM advertising payment models.

Pay Per Click: AdSense PPC advertisments are text ads that appear on your website according to its contextual selection and filtering criteria. When a site visitor clicks on the ad, the advertiser is charged a small amount, of which Google keeps some and pays some to the website owner.
Pay-Per-Thousand Impressions (CPM): AdSense CPM ads are text or image ads and are site-targeted. The advertiser pays each time his ad is displayed on a page (every time Google ad code is executed by a user's browser). The same, each time an impression is registered, a share of the money goes to the publisher. In this case the advertiser gets to choose the sites on which his ads will show.
Here's how things are going to work behind the scenes: Google centralizes the advertisement through AdWords and uses a contextual targeting algorithm for their placement, that is, sorts them out so as to place them on sites with specific appropriate content.
The strategy lies in the reasoning according to which surfers that visit a page might be interested in finding additional info or products on that particular topic. And it works if the website is good enough for the purpose. Hense by having an attractive website and keeping visitors interested so they feel the need to go further and find out more by clicking on the ads, a Website or Blog owner can benefit from the Google Adsense program. 

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