Google Adsense is a program that allows you to display ads on your website from advertisers on Google's content network. It's free to sign up, only takes a couple of minutes, and is extremely easy to implement. All you have to do is paste the Adsense code Google gives you where you'd like the ads to show up on your site. If you've made your own website you can create PHP includes to insert ads on all your pages by only pasting the code into one file (already set up in our free website template), and if you're using a content management system like Wordpress there are plenty plugins that will allow you to easily insert Adsense.
The ads that will appear on your site are controlled by Google, and are dynamically inserted based on the content of your site. So if your site is about cars, the ads will most likely be related to cars. There are various options for ad formats within the Adsense control panel. You can choose different sizes, colors, and borders, along with text and/or images to display.
Try our free Adsense Revenue Estimator to see how much your site can make with Adsense.
While Adsense ads are very easy to implement on your site, the payout or revenue per click is low compared to affiliate commissions or e-commerce sales. However, you don't have to spend time finding and updating affiliate links or interacting with customers who are buying your products in the case of e-commerce, and all a visitor has to do is click an ad and you get paid. It's generally easier to get a visitor to click an ad than make a purchase on your site or your affiliate's site. If your traffic volume or the average CPC (cost per click) of the ads being displayed is high, Adsense can be very profitable:
Making money with Adsense is dependent upon the number of ad clicks you get multiplied by the amount of money you get per click. Ideally your site/ads would generate both a large number of clicks and a high amount of money per click, but you can do well with either, and it's often harder to get both.
When choosing a topic for your Adsense site, as I recommended in my page on choosing a niche, the first consideration these days should be your knowledge and interest in the subject. If you know a lot about the subject of your site, it's more likely you'll do a great job with it, increasing user engagement and natural links...thus increasing rankings and traffic. Check the Google Adwords Tool for traffic and cost per click data on various subjects you're interested in, and then plan the specific layout/design of your site around keyword phrases or areas that will be profitable, based on our free Adsense Revenue Estimator.
Randomly slapping Adsense ads on your site isn't going to produce great results. You'll want to integrate them in the most profitable way, and that involves testing different placements, sizes, and color configurations. Google offers some tips on ad placement (graphic shown above with orange areas being the most high visibility), but you should experiment for yourself to find the optimal integration.
Overly aggressive ad integration can lead to a higher bounce rate, where your visitors quickly leave your site, but under utilization means you'll make less profits. The best placement is generally one that's not obtrusive or annoying to visitors, but placed prominently where they're most likely to look. Making your Adsense colors match your website color theme and using larger font is often better than not. Remember that Google will try to display ads that are actually useful to visitors, so putting them in places that don't detract from the usefulness of your site will be best for you and your visitors.
Note: You can also combine Adsense and affiliate links on your site for maximum revenue potential.