Google’s advertising program actually consists of two separate platforms, AdWords and AdSense. The two programs work hand-in-hand with one another to form one of the largest online ad services in the world. Google’s advertising platforms allow different websites to sell more products and generate more revenue.

What’s really amazing is how much revenue Google’s advertising services generate. Advertising accounted for 96% of the company’s revenues at one point, placing the company’s total advertising revenue well above the $30 billion mark. Read on you’re curious about how Google Ads work.

Google AdWords

AdWords is the heart and soul of Google’s lofty advertising business. Websites that want to increase their traffic register with AdWords and put together an advertising campaign based on keywords. Ads are then displayed on the results pages of searches for these keywords.

For example, a company like ESPN might buy the rights to the keyword “fantasy baseball.” When people make searches for that term on Google, they’ll then be presented with an ad for ESPN somewhere on the page. What helps AdWords function is the fact that users usually pay on a cost-per-click basis instead of a lump sum. The amount that advertisers pay for clicks varies based on the popularity of a keyword, but usually price ranges from 40 cents to more than a dollar.

Google AdSense

Google Ads display in more places than just search results. Chances are that you’ve seen them on everything from major websites to niche blogs. Ads that are displayed on sites other than Google search results are powered by AdSense, which is a program enrolled in by webmasters looking to earn more money from their sites. To put it in a sentence, AdWords ads are displayed on third-party sites that are using AdSense.

Not all companies that use AdWords have to let their ads run on AdSense. By default, AdWords users will only have their ads placed in search results. They are given an option to participate in what’s called the Google Display Network. Only AdWords users who are part of this network will have their ads run on AdSense websites.

Mediums for AdSense

With the rapid change in Internet usage away from desktops and towards smartphones and tablets, AdSense has to be able to work effectively on different devices. Over the years, Google has made it possible for webmasters to run AdSense ads on platforms such as mobile sites and RSS feeds. This maximizes the revenue that Google earns from advertising, but it also maximizes what webmasters can earn through the AdSense program.

The growth of Google Ads as the web changes over the next few years will be interesting to chart. The rise of social media has been huge, and Google has incorporated its own social network into its advertising platform. Tremendous growth has been seen in the online advertising industry in the last few years, and whether Google can maintain that edge will depend on their ability to move into new spaces like social media.

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