In class, we learned about Google advertising algorithm that is mainly used in Google AdWords. AdWords is Google’s advertising product and its main source of revenue. Advertisers bid on the word(s) that will trigger their aids when a user searches that word(s) on Google’s search engine. Therefore, Google not only revolutionize how people create searches on the internet but also revolutionize how people advertise. This new way of advertisement is known as ‘contextual advertising’.

Due to the great success of AdWords, Google created another ad serving program called Google AdSense. Unlike AdWords which provide revenues to Google, AdSense provide revenues for website owners. These owners signed up for the Google AdSense service where Google determined whether the site is ‘clean’ in term of the content of the website. Then AdSense will generate ads based on the content of the website.

An example of a website with advertisement:

How does Adsense work? The source of the ads comes from AdWords. Advertisers who bids on AdWords for a keyword provide ads that show up on the Google search page as well as those websites signed up for AdSense. The relationship between AdWords and AdSense are too complex to explain in a few sentences.

This block diagram show an high level diagram of the relationship between AdWords and AdSense:

Along the line of what we learned in class, the concept that the world react to what you [Google] do. This is reflected on AdSense Advertising Program where the website owners make their websites more appealing to attract Ad from Google. There are websites called MFA (Made For AdSense) which contain mostly ads from AdSense. However, currently, there are some websites owners [who maintained blogs about their hobbies, etc.] who are making money the way Google is making money, by selling slots for ads. It also benefits some advertisers who couldn’t get the slots on Google site. For example, let’s say a small company’s [that sell computer & gadgets] ad might come up on a website that has blogs on computer-enthusiasts and gadgets-lovers.

References:

Block- Diagram::www.vaughns-1-pagers.com/internet/adwords-adsense-diagram.htm

Ted Talk introducing AdSense: http://www.ted.com/index.php/talks/view/id/118

http://en.wikipedia.org/wiki/AdSense