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Before continuing further in the AdSense discussion it is important to understand the relationship between Goodle AdSense and Google AdWords. When it comes to pay-per-click advertising AdWords is hands down the Internet leader.

AdWords are those text advertisements that appear down the right hand-side of a Google search page. The ads are directly related to the keywords you use in your Google search. Advertisers are assured that there advertisements are shown to individuals who already have an interest in their product. AdWords is an amazingly powerful and effective advertising platform on the Internet as businesses are able to advertise in a highly targeted manner.

For example, let’s assume you sell widgets. You can set up your AdWords campaign to only to be shown when people type the word “widgets” in the Google search form. Your ad is shown to a person who has some form of interest in widgets. If someone types in “cars” then your ad will not be shown.

Obviously Google wishes to make a profit from AdWords so when an individual clicks on one of these ads Google charges the advertiser for the click. There is no set charge, rather advertisers bid for keywords and ad position. The advantage to advertisers is that their money is not wasted on non-interested parties clicking on their ads. With the AdWords system Google has enabled small businesses to compete in the Internet marketplace without breaking the bank.

AdSense was a follow-up program to AdWords, allowing website owners to get a piece of the advertising pie. As an extension of AdWords, AdSense allows website owners to place AdWords ads on their web pages. The difference regarding which ads are displayed is not determined by search keywords, but rather by page content. As an AdSense member, Google gives you a piece of JavaScript to paste in the code of your web page. That’s it. This JavaScript enables Google to decide which ads are most appropriate to show on your web page and tracks ad performance as well.

Google’s advanced content recognition technology is so intuitive that it determines which country an Internet surfer is from, displaying ads accordingly. For example if your website sells widgets, Internet surfers in the USA would see advertisements from USA widget retailers and British Internet surfers would see advertisements from British widget retailers. When someone clicks on one these of ads from your website the advertiser is charged a fee and you receive a portion.

Google has established safeguards preventing website owners from clicking on their ads to generate income. They can determine if someone is committing fraud and will ban such individuals from AdSense forever. Participating in this fraudulent behavior is stealing and hurts the industry in general. When individuals are caught and banned it is a positive for the rest.

It is advised that you open an AdWords account in addition to your AdSense account. This will become clearer as we address future AdSense subjects. Like AdSense, AdWords is free to join.

This was a basic presentation of how AdSense and AdWords are related. It is important to study this relationship further to succeed in generating and maximizing revenue from AdSense. Many website owners simply join AdSense, insert the code, expecting the dollars to flow. When reality and expectation don’t meet, the website owner becomes disillusioned and abandons AdSense. Like most things in life, success takes work and perseverance. If you’re expecting quick money you need to look elsewhere. However, if you do your homework and grasp these fundamental concepts you’re on your way to doing well.