An Introduction to Adsense – Making Money With Google Adsense (Part 1 of 3)

September 9, 2013

Part 1 | Part 2 | Part 3

Do you feel like AdSense is a giant beast that just doesn't make sense?

Have you heard that's it's ad sizes that make the difference? Or ad placement? Or keywords? Or. . . ?

Did you know that once you get past the set-up, the data is unbelievable? Are you still confused?

Well, let's change that and make it easy.

The Google Adsense Triangle

12_An Introduction To Adsense - Making Money With Google Adsense (Part 1 of 3)In its simplest form when someone clicks on an AdSense ad, Google charges the company who paid for that click. Then Google pays the website owner for hosting the ad. Whatever is left Google keeps. That means there are three basic parts:

1. Google Adwords: Where companies buy ads
2. Google Adsense: Where website owners agree to host ads
3. Google Web bots: The mechanism that decides which ads go on which page

So, let's figure out how Google Adwords works because with that knowledge we'll build a grand foundation of how to use Adsense

Quick Basics of Adwords

When a company decides to buy ads on Google's search pages (and websites in their network), they go to Google Adwords and sign up. They then create an ad by creating a headline, body copy and producing the web address where they want traffic to go. The secret to making it work is a combination of the right ad along with the right keywords.

A-ha. . . keywords. Yep. Companies have to do one more thing in AdWords before their ads start displaying online. They have to tell Google which keywords they think would lead an audience to buy their product. For instance if the company was selling “all natural cough syrup”, they would tell Google to display their ad for these keywords, at least:

  • all natural cough syrup
  • buy all natural cough syrup
  • best all natural cough syrup
  • all natural cough syrup for kids
  • fastest working all natural cough syrups

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Then Google would know that anytime anyone searched for these keywords, it should show their ad. (It's not quite that easy because they also have to pay money to be shown, but that's the important part).

But Google's search results are not the only places ads can be displayed. Companies can choose to be shown on websites in Google's Advertising Network. . . which brings us to AdSense.

Quick Basics of AdSense

AdSense is the place online where website owners apply to become part of Google's Advertising Network (as mentioned above). Website owners navigate to Google Adsense and apply for the right to host ads. That process is little more than name, address, phone, and web address to start.

Once approved website owners are given access to a dashboard where they can create little snippets of code to put on their site to tell Google “Hey, put an ad here!” The bit of code tells Google what size and kind of ad the website owner wants. The website owner might only have a spot that is 200 pixels wide, so the code tells Google that. And they might just want image ads on their site – the code tells Google that, too.

But the code also feeds information back to the Adsense Dashboard so the website owner can see where their revenue is coming from and make decisions about how they host ads. And that data enables website owners to move the ads around on their site to figure out the best placement for them.

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That leaves only one part. . . which ads get shown on the pages?

Quick Basics of the Google Web bots

Since companies are paying for each click, they don't want their ads to be displayed on pages where they don't have potential customers. So it's up to Google then to make sure that the ads get displayed only when the right keywords are searched AND when the right keywords are there on the page.

Google's web bots visit each page that is hosting ads. These “bots” scan the page for the keywords to see what the page is about. Then the bots tell Google Adwords which ad to serve up on each page.

If the page is about changing diapers for instance, it will tell Adwords that the term “changing diapers” is prevalent on the page which then triggers Huggies, Luvs and Pampers ads to display.

It is the art of matching the advertiser with the audience with the hopes of displaying the ads in only places where people are likely to click the ad and then buy the product.

A bit of a dance to say the least.

How Does that Turn Into Money for Bloggers?

In its simplest form, when Google matches an ad to the needs of the reader on the page, that person clicks the ad and the blogger gets paid.

And some ads pay more money than others, right? Well not really. Some keywords create higher paying ads is a more succinct way to say it. Or some ad sizes create higher paying ads. . . The blog post topic and the ad size dictate if the ad will be high paying or low-paying. The ad position and layout of the page determine if anyone will click them.

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Remember in the beginning when we talked about companies wanting to advertise with Google Adwords and in so doing they named the keywords they wanted their ads displayed? Well there are only one or two spots on most pages, so what happens if 20 companies want their ads to show up for those keywords?

They can't all fit. Because of that Google AdWords is more of an auction where companies not only list the keywords they want to be shown for but they also bid on those keywords. A keyword like “teeth whitening” for instance probably has Proctor & Gamble, Crest, Rembrandt, Sonicare and 100 other teeth cleaning companies bidding for the Ad shows.

When that many bid for keyword, the price of that keyword payout goes up. That means the blogger gets paid more. So then, the key is knowing which keywords to use and where to put them.

So, in Part 2 we're going to talk about what kinds of keywords pay better, how to determine what they pay and how to place them on your site so you can make more money. And in Part 3 we're going to talk about setting up your Adsense Dashboard so you can make more money with the actionable data it returns.

So tell me . . . in the next two Parts, what do you want explained in detail? What myths do you want debunked so you'll forever know?

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15 Comments

  • danrmorris says:

    I love Adsense, such a cool innovation for companies and bloggers alike. I look forward to discussing more in Parts 2 and 3.

  • Mike Kawula says:

    Great post.

    Curious if you know the following: On a previous website I owned w/ a partner, my name/email was registered by one of our team members for an Adsense account. Fast forward 2 years latter when I sold the company and I just went to apply they said my email was associated to another Adsense account. Thoughts, just do another email address or? Thanks.

    • danrmorris says:

      I would try to recover the password first. Then I would ask AdSense if they would shut down the old account. If all else fails, I’d set one up with a new email. But that’s a pain in the long run.

  • Fantastic step-by-step teaching on your article, thanks! Makes me want to get some Adsense going 🙂

    Are there ways to have the highest quality ads on my site? Also, if I don’t like the type of ads showing up, can I made adjustments to try other ads? One more thing – do the ads rotate so they are different all the time?

    Thanks much!

  • Mitch says:

    What does this mean and why did Google ever pay me the 6 grand they owed me for that month in advertising? WHy do I hear about this all of the time? How could they be saying there is “Invalid activity” which they don’t even directly say, they say it might be in danger of? Aren’t these the sme people who can see my GA?
    Adsense is the biggest load of crap on the planet.

    Hello,

    After reviewing our records, we’ve determined that your AdSense account
    poses a risk of generating invalid activity. Because we have a
    responsibility to protect our AdWords advertisers from inflated costs due
    to invalid activity, we’ve found it necessary to disable your AdSense
    account. Your outstanding balance and Google’s share of the revenue will
    both be fully refunded back to the affected advertisers.

    Please understand that we need to take such steps to maintain the
    effectiveness of Google’s advertising system, particularly the
    advertiser-publisher relationship. We understand the inconvenience that
    this may cause you, and we thank you in advance for your understanding and
    cooperation.

    If you have any questions or concerns about the actions we’ve taken, how
    you can appeal this decision, or invalid activity in general, you can find
    more information by visiting
    http://www.google.com/adsense/support/bin/answer.py?answer=57153.

    Sincerely,

    The Google AdSense Team

    • danrmorris says:

      Sometimes this means that your drop down menu overlaps and ad. Thus people scrolling down might actually click an ad instead of a drop down item. There are many reasons for this. They aren’t specific, unfortunately.

    • Mitch says:

      Not the case on my site, the ad department of google are not to be trusted. There are far better options out there than Adsense. Adsense is a joke and are unethical in their business practices

  • Alex says:

    Hey Dan! great post! i really like google adsense. im trying using affiliate marketing at the moment. hopefully that will work great!

    thanks!

  • jaswinder9 says:

    Great information and thanks for explaining it in detail.
    I am using Google adsense and affiliate marketing-as well.
    I like more affiliate marketing than adsense.

  • Michael leng says:

    Thanks for the table of AdSense Estimated Eearning

  • dean jackson says:

    I’ve spoken with a lot of PPC companies, but the most important thing that you can actually do to your marketing campaign is landing pages. Most companies sell you 1 single thing such as web design, or just Google Adwords, or just popups, or just retargeting etc. This is completely ludicrous because while 1 thing may make a difference in a stable marketing campaign, there is no single element that is a make or break element in online marketing, you need the entire package, and then hone/optimize from there. My business revenues increased by over 60% in two months once I picked a good agency that did more than just PPC, but also did my landing pages, retargeting, banner ads, etc. In fact, I’ve got Simon’s phone number right here, you can talk to him too. Just give him a call at 302-401-4478.

  • Kyle Jones says:

    One of the best kinds of PPC ads available today are Google’s remarketing display ads. What’s great about them is that you can segment them by behavior, so if people have been to your home page but not your sales page, you can direct them there. If people land on your shopping cart but don’t buy, you can run ads to send them back to the shopping cart and complete checkout. The power to segment is one of the most powerful advancements in marketing technology in the past century. I didn’t know this when I started but I called Simon (302-401-4478) and I got help. Now I make 22.37% more on my display advertising than I did before and I’ve been selling a lot more product.

  • Daniel says:

    Very informative post on Adsense, Dan.

    Love the way you broke things down and showed the overall “Publisher / Advertiser” process from a wide perspective.

    This is why many people(publishers) often ask why their actual “per click earnings” in no way match up to the click rates shown when they target certain keywords….

    Once Google takes it’s 32% share(YouTube 45%) there is still quite often inconsistencies, or the numbers do not always add up…

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