What Is Google AdSense and How Does It Work?

Making money from a website can be particularly hard, especially when you’re not selling anything. But if you’re looking to make money from your website or blog without selling a product or service, then there is a way, and it goes by the name of Google AdSense.

Since 2003, Google AdSense has been helping website owners make money from their content without having to deal directly with advertisers. No matter what industry or niche you’re in, almost anyone can become part of the AdSense network and start earning money straight away.

If you’ve just made a new blog, or already have an existing website that you’re looking to monetize, then Google AdSense could be the answer. With millions of advertisers looking to advertise their products and services, there’s a good chance someone will want to run ads on your site, and more importantly, pay you money!

To get you up to date with what Google AdSense is and how it all works, we first need to explore its inner workings and how it came to be.

So, for all you beginners wondering “what is Google AdSense”? Here’s what you need to know.

What Is Google AdSense?

google adsense logo

As we briefly mentioned earlier, AdSense is Google’s creation that helps advertisers match up the right publishers and website owners for their adverts. With that being said, AdSense is very similar to AdWords as they both work together to match up advertisers with publishers.

If you’ve ever run an Adwords campaign before then, you’ll notice that you have the option to use the search or display partners network. When AdWords first came out, advertisers were only allowed to target keywords on Google’s website, limiting them to the number of people they could reach.

However, 3 years after releasing AdWords, Google had an ingenious idea: let webmasters display adverts on their sites and split the ad revenue. And that’s precisely what they did!

Today, almost any website can apply to Google to become an AdSense partner. If the website meets specific criteria, then they will be accepted into the network, and they’ll be allowed to display ads on behalf of Google.

Everytime a user clicks on one of these ads, the website owner will receive 68% of the ad revenue for that click. If the average bid for a keyword is $1 then that’s 68 cents for the webmaster, not bad for doing nothing!

How to Use Google AdSense to Make Money

making money adsense logo

As you’ve probably realised by now, AdSense can help webmasters make a lot of money from their visitors if used correctly. However, how exactly can you use AdSense to make money on your own site?

Well, the first thing you need to do is to apply to become an AdSense partner here. Once you’ve submitted your application, it will take a few weeks before it gets reviewed, but as you can imagine Google get thousands of applications a day. If your website meets certain guidelines, traffic, and quality metrics, then your account will get approved.

Once approved you’ll be able to start displaying ads on your website. To install the ads, simply copy the code over from your AdSense dashboard onto a specific page. Ideally, you’ll be aiming for around two ads per page as any less than two won’t be effective, and any more will look too spammy. The last thing you want is to scare all your users away with pages covered in ads.

Google AdSense Earnings

adsense positive graph

Now you’ve got your AdSense account setup and your ads installed, how much can you expect to earn from AdSense?

The bad news is: it’s tough to calculate.

This is mainly because there are so many different factors that contribute to your monthly earnings it will vary dramatically from website to website. However, this won’t stop us (and probably you) from trying to estimate anyway.

The first and most important factor is what industry your website is targeting.

Thanks to Google’s algorithm, your website will only display ads related to your website. So if your site is a blog about health and fitness, then your ads are likely to be related to health keywords. The actual keywords and ads displayed will depend on how Google views your website, so it’s not an exact science.

Once you know what industry and type of ads will be displayed on your site, you can start to work out how much an average click will cost. To do this, you can use UberSuggest to get a rough idea of the cost per click of a specific keyword. However, it’s important to note that on the Google display network advertisers usually pay a lot less per click compared to the search network. This means that a search keyword with an average cost per click of $30 might be only cost $3 or less per click on the display network.

Another way to check the estimated cost per click of the ads on your site is to create a fake display campaign yourself. Of course, you don’t have to spend any money on this campaign, but you will be given access to Google’s own estimated cost per click figures which can be very useful.

To get these estimates, head on over to AdWords and create a new display only campaign.

display network site example

Type in your website’s URL and Google will generate a list of keywords it thinks is suitable for your website.

ppc protect targeting example

Once you add the keywords to the campaign, you’ll notice the estimated cost per click average on the right-hand side will update.

cpc display example

This data should give you a very good indication of how much people are paying per click to run ads on your site.

Now you have a very rough idea of the average cost per click of the ads your website will be displayed; you can work out your cut by calculating 68%. Like we covered earlier, this is the standard commission for AdSense clicks.

The only thing left to calculate now is how many visitors your website will receive and how many clicks your ads will get. These factors rely on two main points: how good is your SEO and where you place your ads.

Unless your website relies 100% on social traffic, then you’ll probably be getting most of your visitors from the likes of Google or other search engines. Knowing how many visitors you get will significantly help in estimating your monthly AdSense earnings. The more visitors you get, the more likely people will click your ads which will result in you earning more money.

The final piece of the puzzle is to calculate your average click-through rate, and then you have all the numbers required to work out how much you could earn. As a baseline, most websites receive a 0.05% – 5% click through rate with the average being 0.1%.

Using these metrics, we can calculate a rough estimate of how much a webmaster might earn from using AdSense.

For our example lets assume that you’re:

  • Targeting the PPC niche
  • The average cost per click of a PPC keyword on Google display is £0.24 – £0.56
  • Your website receives 30,000 visitors a month
  • You have an average click-through rate of 1%

Now we have all the information; it’s time to calculate each step to get an estimated monthly earning.

  1. Calculate how much you receive per click: ((0.24 + 0.56) / 2) * 0.68 = £0.27
  1. Calculate how many of your visitors click your ads: 30,000 * 0.01 = 300
  1. Calculate your total estimated monthly earnings: 300 * 0.27 = £81

It might not sound like a lot for 30,000 visitors, but we have gone for a conservative click-through rate. With multiple ads and correct positioning, a good webmaster could easily increase their CTR to 3% or more which would result in much higher monthly earnings.

How Does AdSense Pay Publishers?

Once you’ve earned your first dollar from Google AdSense, you’re probably wondering how you receive the money so you can spend it. Does Google send the cash in an envelope, or do they send you a voucher instead?

Well, there is good news and bad news. The good news is, they don’t send either. Instead, Google offers a few payment methods to publishers to ensure they get their well-earned cash on time. The first and most popular payment method by far is the ability to receive your earnings via cheque (or check). This payment method is free and is available for almost all international countries.

Another popular way to get paid from AdSense is via your bank account. Currently, this payment method is only available to American banks, unless you want to pay a $10 wiring fee. With the fees being so high, it’s clear why most AdSense users opt for the cheque instead.

The bad news, however, is that Google requires a minimum threshold of $100 before they send you any money. For smaller blogs and websites, this might mean waiting several months before you accumulate enough money to cash out.

The Darkside of Google AdSense

For many website owners, AdSense can be an excellent source of income for their website. So much so that many webmasters rely upon AdSense to pay their bills. With clicks generating anywhere from 10 cents to 1 dollar per click, it’s not uncommon for webmasters to use dirty tricks to boost their earnings.

These tricks are often always against Google’s terms and conditions, but with so money to be made from AdSense, lots of webmasters will take the risk.

A common tactic that many webmasters employ is to purposely click their own ads. Known as click fraud, this type of fraud costs advertisers billions a year in lost ad spend. The webmaster who clicks their own ads obviously has no intention of ever buying or purchasing that product. Instead, they just want to earn more money.

This is a small scale example of click fraud, but as you can imagine a lot of organised fraud rings have scaled their fraudulent activities to generate millions a year. From the likes of Hyphbot and Methbot to click farms, there are plenty of people out there taking advantage of display network ads.

If you want to earn money from Google AdSense, then the best way is to do it legitimately. Clicking your own ads or paying other people to do it might seem like a good idea, but it can often end up in your account getting banned. Not only will you lose all your money, but you could also face legal action from the likes of Google and other advertisers.

Our advice is: don’t try and fool the system.

Many people have tried (and failed) in the past. If you genuinely want to make money from running a website, then AdSense is a great way to do so.

Want to learn more about click fraud and its effect on the ad industry? Discover more of our articles and posts below.