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.

In order to create a Google AdWords ad, it is necessary to specify what keyword or keyword phrase must be input by the visitor before your AdWords ad will be displayed. In addition, you need to set the maximum amount that you will pay to Google for each click on your AdWord.

There is a nominal activation fee but Google does not have a minimum monthly charge. Google provides an account Control Center that allows you to track the performance of your ad. The ad will be displayed within minutes to the searchers after your account billing information has been submitted to Google.

AdWords ads must adhere to specific Google requirements. The title can contain up to 25 characters, the ad text can have up to 70 characters and the display URL must be less than 36 characters.

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