If you look at the Internet a few years ago, you will see that advertising was done in a very similar way to other types of media such as television or, in fact, more like what you see in a newspaper.
You would enter a site and somewhere you would see a banner (often these were quite numerous and very large), which would present an ad from whatever company paid for ads in your space.
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But there was a problem with this type of advertising. I wasn't really exploiting the fact that the ads weren't in some newspaper, but were being served over the Internet.
You have probably noticed many things like this on the pages you have browsed. You are browsing an online store, looking for a watch, but a billboard appears advertising a car.
While you may, at some later point, want to buy a car, right now you are looking for a watch and it surely would have been nice if the banner advertised a watch, because then you probably would have clicked on it.
Well, that was also what the people at Google thought, so they came up with a great idea. This is known as Google AdSense and is known as a targeted advertising program.
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What you do (as a web designer/website owner) is, instead of jumping through hoops to get a banner on your site that your visitors don't even care about, you just assign a region of the screen.
Then you sign up for the Google AdSense program, insert a small snippet of code into your web page, and Google makes sure that at the location you specify, a banner will appear presenting ads relevant to the content on your site.
It is very easy for Google to do this because Google is a search engine company. Search for the keywords on your page, search a database of websites to find those related to whatever is on your page, and voila: a targeted ad.
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You (the webmaster) receive a fee for each visitor who clicks on an AdSense ad on your site. Now, that's going to happen more often than with a traditional banner because people are actually interested in what's on that banner (otherwise they wouldn't be on your page, right?).
But, this also works wonders for people who want to advertise. And it is for the same reason. The best thing about Google AdSense is that all the content of a banner is relevant.
This relevance is the key to the success of the programs, and also the reason why everyone is happy. The advertiser has a relevantly placed ad, the publisher makes money from their content, and Google takes their cut.
Of course, as always, Google has set high standards for its AdSense program, in terms of appearance and functionality. You may not have more than two such banners on your website, and Google only inserts text into these banners.
So an added benefit is that AdSense advertising is much less annoying than regular advertising. But this also means that you need to position the banner better because visitors may miss it entirely.
So, in the end, Google AdSense is an advertising program that is unique in that the ads are relevant to the content of the site. Anyone who wants to advertise pays Google for it. Anyone who wants to place ads on your site does so through AdSense, and gets paid by Google in the process.
All transactions are executed through Google, and advertisers and publishers get access to statistics that help them understand and moderate the effectiveness of their campaign.
The entire process is elegant, simple, and effective for everyone in the chain, from site visitors to advertisers, and it's one of the reasons Google is known for innovation and new thinking.
Article Credit : PlrPlr