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How Does Google Ad Revenue Work

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Google is the most used search engine in the world, yes, and if I might say so with a little bias as a Google employee, it’s also the best. On average, 3 out of 4 people in the entire world hear about something new or get their news from Google. That’s a boggling number when you stop to think about it. With that primary visibility and reach, it’s no wonder that AdSense accounts for over 35% of Google’s revenue.

For search advertising, ads are placed next to relevant search results and appear based on a keyword match

Google AdSense is a cost-per-click (CPC) advertising service that allows website owners to display ads on their websites. The advertisers pay Google when users click on the ads. AdSense publishers are paid when the ads are displayed on their websites.

Google’s AdWords program provides advertisers with placement services for pay-per-click advertisements based on search keywords. The AdSense program includes two types of advertisements: text and display ads.

Text ads contain one line of text and are placed at the top or bottom of a web page; display ads consist of an image or other media and can be shown as a rectangle in a frame or as an animated graphic.

In content advertising, ads are embedded in the content of a webpage or app

These ads can be text, images, video or even audio. The advertiser pays for each ad impression (view) and click on the ad. In search advertising, the advertiser pays for each click on their ad. Ads are displayed when someone uses Google Search to look for something specific.

Paid search ads appear at the top and bottom of Google Search results and above organic search results. They also appear in other places around the web where they can be seen by people who may not be looking for them but have searched for something similar to what you’re offering.

An example would be an ad for hotels in New York City appearing beside a news article about a recent terrorist attack in that city. Google AdWords is the most popular platform that enables companies to run paid search ads.

How Pay Per Click Pricing Works

  • Pay per click (PPC) is an internet marketing strategy where advertisers pay a fee every time a visitor clicks on their ad.
  • Clicks are the most common metric used to charge advertisers, but others include impressions and actions.
  • Advertisers bid on keywords that trigger ads when people search for them, which means the advertiser only pays when a user clicks on their add.
  • Advertisers set their own budget and advertising budget allocated per click by setting maximum CPC bids in their account settings under “Bidding & Budgets.”
  • The amount you set as your maximum CPC bid determines what you’re willing to pay per click on an ad, while still being competitive with other advertisers bidding on the same keyword(s).

How Every Other Ad Platform Gets You Paid

You probably know that there are a lot of ad formats out there. But do you know how they work? As someone who has worked at Google Ads, I can tell you that there are many different types of ads and they all have their own quirks. Here’s a quick look at four of the most common ad formats:

Google AdSense is the most common way for bloggers to monetize their websites. You place these banner ads on your site, then Google pays you when someone clicks on them. The advertiser pays Google for each click, then Google pays you a portion of that money.

AdWords is another popular option for bloggers and small businesses who want to drive traffic to their website. With AdWords, you create an ad campaign with specific keywords and phrases and drive traffic from search engines like Google or Bing.

When someone clicks on one of your ads which appear above or below search results then you pay Google for every click, as well as for any sales if someone buys something on your site after clicking on an ad. In other words: You pay nothing unless someone clicks on your ad first.

Display ads have lower click through rates than search ads

A display ad is a banner ad, which you’ve probably seen before. A search ad is an AdWords ad that appears in the main search results on or one of Google’s other services, such as Gmail. The two types of ads are very different in how they work. Here’s a quick breakdown:

Search ads appear at the top and sidebar of the page where the search results appear, while display ads appear on websites around the web in boxes that are outside the actual content of those sites. The key difference is that people looking for something specific will be more likely to click on a search ad than someone randomly surfing around the web.


It’s also important to understand how impressions factor into Google’s ad revenue. An impression is counted when a user views any part of an ad, but not when the user only scrolls past it. Even if the majority of people viewing an ad never click on it, Google will still count that as an impression