Google's AdSense: Turning Clicks to Cash

2005-05-19
Reprinted from The Triangle Technical Journal

In business, cash is king – and the ability to generate it while you sleep is golden. As professionals, we should always be open to innovation and on the lookout for new (and of course, appropriate) revenue streams. Thinking along those lines, my company, hesketh.com, has been investigating the merits of the Google AdSense program.

Google AdSense is a program that enables website publishers to serve ads precisely targeted to the specific content of their individual web pages. Essentially, publishers serve text-based Google AdWords ads on their sites; advertisers then pay Google for every “click-through” to their sites; and Google pays the publishers a “commission” for clicks on those ads. But wait – First, what are Google AdWords you ask? Google AdWords, predecessor to Google AdSense, is a self-serve program that allows advertisers to create their own ads and select keywords and phrases to bid on – basically, it’s a Pay-Per-Click (PPC) setup. Advertisers can specify if they want to appear in Google’s Search Engine Results Pages (SERP’s) and/or on participating publisher sites.

Initially, the Google AdWords program worked very well, but Google saw a problem on the horizon. With the rising demand for the ads increasing, they realized that soon they would not be able to display enough ads to maximize the full potential of the Google AdWords program. It became quickly apparent that if they relied only on the pages of Google to display the ads, the total number of ads they could serve would be limited by the number of search results page views. So Google took the next logical step and began to seek partners to syndicate the ads – and hence, the Google AdSense program was born. Using AdSense, Google was now able to distribute their AdWords across an incredibly wide assortment of sites, sealing the program’s ability to continue to grow and earn revenue.

The premise behind the Google AdSense program is that users will benefit from more relevant ads and publishers can maximize the revenue potential of their websites. According to Sergey Brin, co-founder and President of Technology at Google, “Google AdSense improves the overall web user experience by bringing relevant, unobtrusive, text ads to web pages rather than disruptive, unrelated ads such as pop-ups and animations. By providing website publishers with an effective way to monetize content pages on their sites, Google AdSense strengthens the long-term business viability of content creation on the Web.”

Google breaks AdSense down into three free programs:

  1. the regular AdSense program – which offers participating publishers 10 different fonts and colors to match their websites

  2. a premium program for publishers with more than 20 million page views or 5 million search queries per month – which offers the following benefits:

    1. a Google sales representative and account manager

    2. flexible ad formats

    3. advanced filtering

    4. optimization assistance

    5. additional monetization options

    6. enhanced technical support

  3. a program for domain name registrars and resellers.

So how much can a publisher earn from the Google AdSense program? Basically, it’s limitless – it depends entirely upon the niche your website fills. Revenue generation is also dependent on a number of factors:

  • The number of pages viewed per day

  • The topic of your content

  • The price paid by the advertiser for each click

  • The number of people who click on the ads

In order to maximize AdSense earnings, some tips include:

  • Use the right ad format and placement. For example, choose the vertical – not horizontal – format to display your AdWords. This format is recommended, because not only have users become “banner blind” to the horizontal format, but by using the vertical format on its own site, Google has already “trained” users to click on relevant text ads using this format.

  • Whenever possible, use higher paying keywords. If you are not sure which keywords pay more, then go to Overture.com and use the View Bids Tool to see what different advertisers are paying on Overture for each keyword. Granted, there will be pricing differences between Overture and Google – but it will give you a general idea of what keywords will pay more than others.

    But do NOT create pages on unrelated keywords just because they pay more. Remember that the Web is built on trust and such devious actions undermine not only that trust but also the quality of information offered to users.

  • Create and maintain a quality site with lots and lots of relevant and very clearly focused content.

  • Do not cheat. Do not click on the AdWords displayed on your own site to increase your revenue. Google frowns on this – not to mention that Google has some of the brightest engineers around and you will most likely be caught and expelled from the AdSense program.

Once you’re up and running, Google will issue payment on a monthly basis when revenues reach at least US $100 or more. If the site has earned under that, the balance is rolled over to the next month.

To participate in the Google AdSense program, website publishers can visit www.google.com/adsense. Google’s editorial team will review each publisher application to ensure that the site meets editorial guidelines. Once approved, the publisher will activate the service by logging into her account and cutting and pasting a small piece of HTML into her web pages or ad server. Once the program is activated, a publisher can monitor ad performance through detailed online reports 24 hours a day, seven days a week. The reports include such information as: exactly how many times the ads have been shown and on what dates, as well as how many clicks were registered and what amount of money they generated. Google’s editorial team also monitors each participating site on an ongoing basis.

So what’s the potential of such a program? Forrester Research expects a 30% growth in search advertising revenue this year, after a 45% jump in 2004. Further, according to e-commerce experts, the online search advertising business is projected to surge to more than $5 billion by 2008, up from $2.7 billion in 2004. And to think, that’s revenue we can make in our sleep.