AdSense is one of the best ways to monetize your web traffic. People see those little Ads by Gooogle tidbits and they click like crazy. Or at least thats the plan. But have you ever given though to where those ads are coming from? That would be AdWords, the Pay-Per-Click program for people who want to advertise their products on Google.

They are the fine men and women who are willing to part with some coin of the realm every time a visitor to your web site chooses to click on an AdSense ad. Google grabs the cash from the AdWords' members account, keeps some of it for themselves, and gives the rest to you. How much they keep and how much give away is a State secret, but who cares; just as long as were getting ours each month.

How AdWords Works

AdWords provides pay-per-click advertising to merchants who are willing to shell out anywhere from a minimum 05 .05 per click all the way up to a maximum of $100 per click. Can you imagine anyone paying $100 just to have someone click on an ad?

Anyway, the advertiser joins the AdWords program and gets a control panel similar to the one that we AdSense users get. They can write their ads, pick their keywords, and establish an advertising budget. They get tools to track performance as well as to help them pick keywords. There are no monthly minimum spends required and they can turn their ads on and off at will.

Once an advertiser is happy with their ad, it gets released to the network and shows up on web sites like yours and mine. Thats if the keywords on your site match the keyword requirements of the brand spanking new ad, of course.

They cant buy their way to the top

Google doesnt simply push the people with the highest paying ads to the top of the SERP (Search Engine Results Page). They use a rather fair methodology that takes into consideration not only the maximum CPC (cost per click), but also includes a secret recipe for determining an ads placement based upon the number of clicks the ad receives. So, at least in theory, an ad paying .05 per click could rise above one paying $5.00 per click if its more popular with Googles audience.

I say in theory because if the owner of the $5 ad is paying attention then he or she will see that they are being bested by a lowly nickel ad and do some serious rewriting to get back up to the top where they belong.

Personally, Im not sure that I have the guts to invest a lot of money into hoping that people who click on my ad will actually buy something, since I still have to pay Google whether I make a sale or not. But, as a dedicated AdSense user, Im sure glad that my AdWords brothers and sisters have more nerve than I do. And you should be thankful as well.