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Google Adsense Ads are small contextual ads that are published on web sites. All these ads are created by publishers that are selling products or creating their brand awareness. The ads that are created are called Adwords and they are also a Google sponsored program.
You have to understand this, Google Adwords and Adsense run hand in hand. Every time someone does a search on Google or one of their partner networks and clicks on one of the sponsored ads (the ads that you see on the right hand side of the page), the person who created that ad will pay Google a predetermined price. Keywords range anywhere from a few cents to in excess of $50 per click! This is also known as PPC (pay per click) advertising.
Adsense ads are the adwords ads that published on the websites that you own (presume that you got one, but if you do not, i will tell you step by step on how to set up a website with adsense program later), so if someone click on the ads, you will split the amount of money that Google receives from the creator of the ad. It is a well guarded secret what the percentage of the split is, it ranges from 20 - 50%.
Let's say if a advertiser is willing to pay $1 per click for his Adwords ad, then you as a website owner that publishes Adsense ads can expect to see roughly $0.50 every time someone clicks on that ad that appears on your site. The other $0.50 is kept by Google. So basically it is a partnership of sorts between Google and you.
Relevant Adsense ads are shown according to the content of your website. Let's say you had a website featuring car insurance, Google Adsense will put ads related to car insurance on your website. If a page of your site was dedicated to car audio system, then the Adsense ads appearing on that page would be for car audio system.
It's easy to see how someone with a website that generates a decent amount of traffic can make some nice money by putting Google Adsense on their site. Some top Internet marketers earn in excess of $10,000 a month with Adsense, and you can too.
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