Introduction to Google AdSense

If you’re familiar with implementing AdSense on your Website, then this is most likely an article that’s safe for you to skip. The main audience to reach are those who aren’t currently familiar with AdSense or implementing ads in general. To start, some of you reading this may feel skeptical, overwhelmed, anxious, or doubt that you can even do this — especially if you have absolutely no idea what “Google AdSense” is. Well, please give this post — and yourself(!) — a chance. We will do our absolute best to give you a solid foundation of how ads work and how you can easily implement them on your very own site via Google AdSense. With that said, let’s get started with building your online money-making foundation with ads.

The Nuts and Bolts of Ads

Prior to this point, you may or may not have heard of Google AdSense. If you haven’t, it’s an ad network that Google has set up to allow Web site owners, bloggers, and others to place ads on their site and make money. Put simply, an ad network is essentially a place that contains ads from companies who are looking to advertise on Web sites. Companies approach ad networks and they ask them to run their ads on sites that are signed up on the ad network (i.e. if you had a Google AdSense account). Simple concept, right? The quick ‘n dirty breakdown goes something like this:

  • 1 – Begin with a Web site or a blog.
  • 2 - Sign up for a Google AdSense account (it’s free).
  • 3 – Prepare an ad unit to be posted on your site (color, size, and content you would like to filter).
  • 4 – Place your ad unit on your Web site/blog.
  • 5 – Populate your Web site/blog with content.
  • 6 – Promote your Web site/blog and make money from ad clicks/ad views.

Now, it’s not so simple to just follow 6 steps and profit, but that’s the essential framework of how it works. There is a great deal that you need to do with each step to help #6 along and we will cover the essentials later in the post. But for all intents and purposes, it really comes down to having a site, signing up for AdSense, creating an ad unit (basically, a placeholder you put on your Web site that runs ads from Google AdSense), then placing it on your site and hopefully making money as you populate your site with content and grow its popularity. Now, if you’re like me, you need almost granular detail about how something works to feel like you’ve got a solid understanding of it.

In order for you to really understand how this all works you have to understand the ad ecosystem a bit. In other words, how do these ads — seemingly EVERYWHERE you go these days online — actually help make a person money? How do these ads make Google BILLIONS of dollars? How does Google pay you when you place these ads on your site? How do the companies that these ads are created for profit?

First, it’s important to understand what happens when someone clicks an AdSense ad. The site that runs the ad makes money AND Google makes money. In fact, Google earns more than you do by a wide margin, so that’s how Google can afford to do this. So, to take you to the top of the chain of how it works, companies go to Google and they say, “Hey, Google! I’ll pay X amount of dollars/cents to you for every ad click and/or ad impression if you run my ad on relevant sites that people have AdSense installed on.” Google then takes that ad (which must first go through a strict acceptance process), pops it on their AdSense network, then — if your site is deemed relevant to the content of the ad — Google will give you a percentage of what they earn from every click on that ad if it displays to a visitor on your site.

The only grab to the whole thing is that you don’t see any of that money hit your bank account until you earn $100 worth of clicks/impressions (impressions are simply the ad being displayed. A small amount is usually paid per X number of impressions, but clicks are always worth far more). That’s okay, though, because seeing even one cent show up in your AdSense account is a huge motivator if you’ve never messed with it before. Once you see that it really works, it motivates you. It can get frustrating sometimes when you don’t see the numbers rise quickly, but always remind yourself that you have PLENTY OF TIME to work on this!

Don’t let your desire to make money override sound perspective. Even if it takes you a year to hit $100 that will be an extra $100 you didn’t have before! Plus, the learning experience makes it worth it.

When you sign up, they require your Social Security number (SSN), address, name, and additional personal information. This is because you’re essentially starting your own little freelance business. And because Google are the ones who pay you, they have to report all of these things when it comes tax time.

Now, where taxes are concerned, it is very important for you to understand that you have to report your earnings (here in the U.S. at least). With earning money online comes a certain level of responsibility. Don’t dig your own grave by earning a lot and then spending it all! If you remember taxes and integrate that into your earning process, you will not have to worry about shelling money out-of-pocket to cover them if you don’t have enough write-offs to balance your earnings. A good rule I recommend is to put away 50% of what you earn every time you get paid. That will ensure that you have more than enough come tax time.