Overview
Google uses its Internet search technology to serve advertisements based on website content, the user's geographical location, and other factors. Those wanting to advertise with Google's targeted advertisement system may enroll through Google AdWords. AdSense has become one of the popular programs that specializes in creating and placing banner advertisements on a website, because the advertisements are less intrusive and the content of the advertisements is often relevant to the website. Many websites use AdSense to monetize their content; it is the most popular advertising network. AdSense has been particularly important for delivering advertising revenue to small websites that do not have the resources for developing advertising sales programs and sales people to generate revenue with. To display contextually relevant advertisements on a website, webmasters place a brief Javascript code on the websites' pages. Websites that are content-rich have been very successful with this advertising program, as noted in a number of publisher case studies on the AdSense website. AdSense publishers may only place up to three link units on a page, in addition to the three standard ad units, and two search boxes. This restriction is not applicable for premium publishers who work directly with account managers at Google. Some webmasters put significant effort into maximizing their own AdSense income. They do this in three ways:
- They use a wide range of traffic-generating techniques, including but not limited to online advertising.
- They build valuable content on their websites that attracts AdSense advertisements, which pay out the most when they are clicked.
- They use text content on their websites that encourages visitors to click on advertisements. Note that Google prohibits webmasters from using phrases like "Click on my AdSense ads" to increase click rates. The phrases accepted are "Sponsored Links" and "Advertisements".
The source of all AdSense income is the Ad-Words program, which in turn has a complex pricing model based on a Vickrey second price auction. AdSense commands an advertiser to submit a sealed bid (i.e., a bid not observable by competitors). Additionally, for any given click received, advertisers only pay one bid increment above the second-highest bid. Google currently shares 68% of revenue generated by AdSense with content network partners, and 51% of revenue generated by AdSense with AdSense for Search partners.
History
Google launched its AdSense program, originally named content targeting advertising in March 2003.[9] The AdSense name was originally used by Applied Semantics, a competitive offering to AdSense and then adopted by Google after Google acquired Applied Semantics in April 2003.[10] Applied Semantics was started in 1998 by Gilad Elbazand Adam Weissman. Some advertisers complained that AdSense yielded worse results than Ad-Words, since it served ads that related contextually to the content on a web page and that content was less likely to be related to a user's commercial desires than search results. For example, someone browsing a blog dedicated to flowers was less likely to be interested in ordering flowers than someone searching for terms related to flowers. As a result, in 2004 Google allowed its advertisers to opt out of the AdSense network. Paul Buchheit, the founder of Gmail, had the idea to run ads within Google's e-mail service. But he and others say it was Susan Wojcicki, with the backing of Sergey Brin, who organized the team that adapted that idea into an enormously successful product. By early 2005 AdSense accounted for an estimated 15 percent of Google's total revenues. In 2009, Google AdSense announced that it would now be offering new features, including the ability to "enable multiple networks to display ads". In February 2010, Google AdSense started using search history in contextual matching to offer more relevant ads. On January 21, 2014, Google AdSense launched Direct Campaigns, a tool where publishers may directly sell ads. This feature was retired on February 10, 2015.
Types
AdSense for Content
The content-based adverts can be targeted for interest or context. The targeting can be CPC (click) or CPM (impression) based. There's no significant difference between CPC and CPM earnings, however CPC ads are more common. There are various ad sizes available for content ads. The ads can be simple text, image, animated image, flash, video, or rich media ads. At most ad sizes, users can change whether to show both text and multimedia ads or just one of them. As of November 2012, a grey arrow appears beneath AdSense text ads for easier identification.
AdSense for Search
AdSense for search allows publisher to display ads relating to search terms on their site and receive 51% of the revenue generated from those ads. AdSense custom search ads can be displayed either alongside the results from an AdSense Custom Search Engine or alongside internal search results through the use of Custom Search Ads. Custom Search Ads are only available to white-listed publishers. Although the revenue share from AdSense for Search (51%) is lower than from AdSense for Content (68%) higher returns can be achieved due to the potential for higher Click Through Rates.
AdSense for video
AdSense for video allows publishers with video content to generate revenue using ad placements from Google's extensive advertising network. The publisher is able to decide what type of ads are shown against their video inventory. Formats available include linear video ads (pre-roll or post-roll), overlay ads that display AdSense text and display ads over the video content, and the True View format. Publishers can also display companion ads - display ads that run alongside video content outside the player. AdSense for video is for publishers running video content within a player and not for YouTube publishers.
How AdSense works
- The webmaster inserts the AdSense JavaScript code into a webpage.
- Each time this page is visited, the JavaScript code uses inlined JSON to display content fetched from Google's servers.
- For contextual advertisements, Google's servers use a cache of the page created by its Media-bot crawler to determine a set of high-value keywords. If keywords have been cached already, advertisements are served for those keywords based on the AdWords bidding system. (More details are described in the AdSense patent.)
- For site-targeted advertisements, the advertiser chooses the page(s) on which to display advertisements, and pays based on cost per mille (CPM), or the price advertisers choose to pay for every thousand advertisements displayed.
- For referrals, Google adds money to the advertiser's account when visitors either download the referred software or subscribe to the referred service. The referral program was retired in August 2008.
- Search advertisements are added to the list of results after the visitor performs a search.
- Because the JavaScript is sent to the Web browser when the page is requested, it is possible for other website owners to copy the JavaScript code into their own webpages. To protect against this type of fraud, AdSense customers can specify the pages on which advertisements should be shown. AdSense then ignores clicks from pages other than those specified.