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Introduction to Adwords and Adsense

Google Adwords and Adsense are two sides of the same coin. They work hand in hand to deliver targeted ads to prospective customers and create revenue for advertisers, website owners, and of course - Google.

Adwords is a targeted ad system offered by Google to advertisers. Advertisers submit a list of keywords or phrases for their ads, which triggers them to be shown on a website or in Google's search engine results pages (SERPs). Advertisers pay Google for each click the ads generate.

Adsense, on the other hand, is an ad serving program that allows website owners to unobtrusively display relevant text, image and, more recently, video advertisements on their sites. It is also a way for website owners to add Google search in their websites and to earn money by displaying ads on the search results pages. The ads posted on each site are administered by Google and creates revenue for the website owner. Although website owners need not pay to join the program they still get paid for each click received by the ads shown on their site or for the every thousand times a specific ad appears on the website. This is why AdSense is called a pay-per-click and pay-per-impression program.

Keyword Targeting and Site-Targeted Advertising

As mentioned earlier, Adwords and Adsense are two sides of the same coin. For both programs to work they need the other. Adsense affiliates need the data provided by Adwords advertisers to be able to display relevant ads in their websites. But how does Google know which ads are relevant? How does Google match the ads to the websites?

In their Adsense FAQ, Google answered the question. According to Google they use Google search and page-ranking technologies to deliver the ads to the websites. Google matches advertisers and websites using two different techniques ' keyword targeting and site-targeted advertising. The choice as to which technique will be used in the matching process is up to the advertiser.

Keyword Targeting

Keyword targeting uses keywords or key phrases to match the ads to websites. Google compares the keywords to the content in a website and decides whether the ads will be relevant the site's visitors. However, Google matches the ads to the websites not only using the simple keyword matching described above but also using a complicated algorithm that factors in keyword analysis, word frequency, font size, and the overall link structure of the web. What that algorithm is, of course Google will not tell.

Site-targeted Advertising

Site-targeted advertising is an option Google offers to its advertisers. In site-targeted advertising advertisers are allowed to pick the sites that they want their ads to appear in. This site-targeted advertising option is beneficial for advertisers who know their target audience and the sites they regularly visit. This option does not use the complicated algorithm used in keyword matching. Instead it simply matches the ads to the websites as requested by the advertisers in a straightforward manner. This option is just as effective as the keyword matching option if the advertiser was able to choose the best sites for them to appear. Best being sites whose majority of visitors belongs to the advertisers' target audience.

The Need for More Websites as Advertising Hosts

Adsense and other targeted advertising systems have proven to be very effective and are so popular nowadays that there is a need for more available advertising spots in websites accommodate the number of Adwords advertisers. There are many websites out there willing to profit from ads but since Google is after quality and relevance, not just any site will. There is a need for good web pages to serve as advertising host. A good web page means that the web page has rich content and also has a lot of traffic or visitors. Even if a website has good content but generates little traffic it would not be a good advertising host since the ads will be seen only by a few. A website with lots of traffic but crappy or questionable content is also not to Google's taste since they have standards to maintain to ensure quality. Quality websites like that which is still not Adsense affiliates are getting increasingly hard to find. Because of this, Google came up with a new method that will aid in the discovery of such sites. The new method will then be used by Google to help them present new quality sites to their Adword advertisers who want the option of site-targeted advertising.

Google's New Method

Last May 4, 2006 a new patent filed by Google entitled Determining prospective advertising hosts using data such as crawled documents and document access statistics (US Patent Application 20060095322) was published. The patent listed Timothy Matthew Dierks as inventor. The patent describes the new method that Google will use, or most probably is using already, to help discover new websites and web pages that can serve as advertising hosts for their Adwords ads. The method will be used for three basic purposes as summarized by William Slawski on his article Google on Improving Adsense/Adwords. The three basic uses are:

1. Accepting websites as advertising sites/hosts
2. Scoring the web pages in terms of expected page views and ad revenue per page view
3. Sorting the documents based on their scores

After sorting the documents based on their scores the viable web pages will then be presented to advertisers for their consideration. Websites and/or pages chosen by the advertisers will then be used as their ads host.

Some of the information that will be presented by Google about the web pages to help advertisers make their choice are:

1. Features of the web page
2. Content on the web page
3. Information about the web page (i.e. host)
4. Importance or quality of a web page
5. Characteristics of the web pages' visitors
6. Absolute position of the ad in the web page and its position relative to the other ads on the page
7. Absolute size of the ad and its size relative to the other ads
8. The ad's color
9. The number of other ads that will be running on the page
10. The types of other ads that will run on the page
11. Time of the day, week, and year the ad will be served'and more.