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For many people, Google's Adsense publishing program is responsible for their very first taste of an online income. It may be pennies and cents but that first time you look in your account and see a credit is an exciting moment; the possibilities suddenly open up before you as you finally realize that all those stories of online businesses and internet income are based on truth.
It is possible for anyone to earn money online. Yes, it is just pennies and cents, and it is sporadic if you aren't systematic about your website or your business; but it is, at least, a taste of success which becomes sweeter as time passes and more pennies and cents slowly trickle into your account.
Since Google took over the developer blog network 'Blogger', even more people have experienced this first light at the end of the tunnel. It is easy to go to Blogger.com, create an account and within a few short minutes have Google Adsense advertisements appearing on your blog and ready to pay you. The opportunities on the internet for an income are huge, and Google Adsense is only one of them but, it is such a simple program, easy to join and set up, with a simple payment scheme, that for a beginner or advanced player it is difficult to ignore.
What many don't realize is that the small text adverts, which look like ordinary classified ads, which appear on countless web pages and display the words "ads by Google" below them are at the root of the Google company's billions of dollars of profit each year. Yes, Google has expanded in many directions and draws a profit from many different enterprises; but it is from these seemingly innocent advertisements that their initial massive success came, and it is from these advertisements that their continued profits derive.
The system whereby these adverts are created and displayed is one which has the bare minimum of administration by Google, and runs almost like a "self service" laundrette for advertisers and publishers. It was a unique idea when it first began, and while Google isn't the only user of this technique, it is certainly the most successful user.
In the old days of internet advertising, advertisements would appear on websites in much the same way as they would appear in magazines and other print media. A website owner, known as a publisher would display an advertisement and, depending upon the popularity of the website, he or she would get paid a publishing fee by the advertiser.
This is the traditional model of advertising from the off-line print and publishing world. The problem with this model for web pages, though, is that it's difficult to track. There was no way of knowing precisely how many people saw the advert, or how effective it was. Advertisers love to link advertising revenue with sales and there was no way of making that link conclusively. A website may go in and out of popularity far quicker than a magazine might, and a website owner with an eye on profits might fill up his pages with adverts thereby destroying the effectiveness of each again, something which a popular magazine would be unlikely to do.
This meant that the price paid for
placing an advertisement was never a clear cut deal - unlike magazines and newspapers whose advertisement sizes and positions had been established over decades and advertisers lacked confidence in the new medium overall.
The answer to all these problems came in the shape of PPC, or Pay Per Click, advertising. The essence of Pay Per Click is that an advertiser only pays a publisher when their advertisement is clicked on by a visitor. This means that it doesn't matter how often an advert appears on a website, and it doesn't matter how big or small it is, if no one clicks on it then the advertiser doesn't pay.
This system is at the heart of Google's Adsense program - all those small text ads, and many others besides, are representative of this system. Each time one of those little ads is clicked on, the advertiser pays the website that displays it. But that's not all the engine behind the Adsense adverts is Google Adwords.
The Google Adwords program is the other side of Adsense. If Adsense is the publisher's side of advertising, then Adwords is the advertiser's side. When a business, service, or anyone in fact wants to advertise themselves, their product or service, they go to Google Adwords. It is almost as simple a procedure as Adsense. Traditionally, to advertise in a magazine, newspaper or periodical of any kind it was necessary to book space in advance, pay a designer to design your advert, pay a copywriter to write your advert, have the artwork created, pay in advance and submit by the deadline for your issue.
You would need to negotiate with a sales department and sign agreements. Good rates were based on good working relationships and regular custom; Adwords broke through all that. When an advertiser joins Google Adwords, he simply keys in the target keywords for his ad, writes the few short lines of text to appear in the ad, and then decides how much he want to pay. The ad will appear on Google's search engine results pages whenever the target keyword is searched upon, and will also appear on any websites targeting the keyword, which are displaying Google Adsense adverts.
The rate of the advertiser's fee is based purely upon the popularity of the keywords he has chosen to target the more popular a keyword is, then the more advertisers will be targeting it; and the more costly it is when someone clicks on an ad. In fact, the whole process is automated those who set a higher budget for their ads will have their ads appear in the prime positions but will also pay the most when their ads are clicked on. In effect, "the market" decides the price.
While it is true that those with the bigger budgets will get the better ad placements - that is nothing new in advertising. What is new is that anyone can place an ad on any budget they choose. For less popular keywords you can pay mere pennies and cents for an advertising campaign. The income of Adsense publishers is directly in proportion to the payments of the advertisers; if you have a website displaying Adsense adverts and your website is targeting popular keywords then those higher paying advertiser's fees will be coming to you.
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