AdSense is an ad serving program run by Google. Website owners can enroll in this program to enable text, image and, more recently, video advertisements on their sites. These ads are administered by Google and generate revenue on either a per-click or per-thousand-impressions basis. Google is also currently beta-testing a cost-per-action based service.

Google utilizes its search technology to serve ads based on website content, the user's geographical location, and other factors. Those wanting to advertise with Google's targeted ad system may sign up through AdWords. AdSense has become a popular method of placing advertising on a website because the ads are less intrusive than most banners, and the content of the ads is often relevant to the website.

It currently uses JavaScript code to incorporate the advertisements into a participating site. If it is included on a site which has not yet been crawled by the Mediabot, it will temporarily display advertisements for charitable causes known as public service announcements (PSAs). (Note that the Mediabot is a separate crawler from the Googlebot that maintains Google's search index.)

Many sites use AdSense to monetize their content and some webmasters work hard to maximize their own AdSense income. They do this in three ways:

1. They use a wide range of traffic generating techniques including but not limited to online advertising.

2. They build valuable content on their sites; content which attracts AdSense ads and which pay out the most when they get clicked.

3. They use copy on their websites that encourage clicks on ads. Note that Google prohibits people from using phrases like "Click on my AdSense ads" to increase click rates. Phrases accepted are "Sponsored Links" and "Advertisements".

The source of all AdSense income is the AdWords program which in turn has a complex pricing model based on a Vickrey second price auction, in that it commands an advertiser to submit a sealed bid (not observable by competitors). Additionally, for any given click received, advertisers only pay one bid increment above the second-highest bid.

AdSense for feeds:

In May 2005, Google unveiled AdSense for feeds, a version of AdSense that runs on RSS and Atom feeds that have more than 100 active subscribers. According to the Blog, "advertisers have their ads placed in the most appropriate feed articles; publishers are paid for their original content; readers see relevant advertising — and in the long run, more quality feeds to choose from".

AdSense for feeds works by inserting images into a feed. When the image is displayed by the reader/browser, Google writes the ad content into the image that it returns. The ad content is chosen based on the content of the feed surrounding the image. When the user clicks the image, he or she is redirected to the advertiser's site in the same way as regular AdSense ads.

AdSense for search:

A companion to the regular AdSense program, AdSense for search lets website owners place Google search boxes on their pages. When a user searches the web or the site with the search box, Google shares any ad revenue it makes from those searches with the site owner. However, only if the ads on the page are clicked, the publisher is paid. Adsense does not pay publishers for mere searches.

How AdSense works:

Each time a visitor visits a page with an AdSense tag, a piece of JavaScript writes an iframe tag, whose src attribute includes the URL of the page. Google's servers use a cache of the page for the URL or the keywords in the URL itself to determine a set of high-value keywords. (Some of the details are described in the AdSense patent.) If keywords have been cached already, ads are served for those keywords based on the AdWords bidding system.

The storage requirements of an AdSense system are stunningly modest. If each URL has just 8 "high-value" keywords, each represented by a single 32-bit number, then the keywords for each URL could be represented with just 32 bytes. The high value keywords of 4 billion URLs could be stored in 128GB, which would cost only $100 (circa 2006). 400 billion URLs or 100 drives (for a redundancy of 100) would require only $10,000 in storage costs.

AdSense serves a very large number of pages each day. If each day around 1B people saw 10 AdSense impressions (or 100M people saw 100 AdSense impressions), then AdSense would serve around 10B requests/day, or 115,741 requests/sec. If one machine can serve 20 reqs/second (seek times to read a random 4096-byte location on a drive allow for bursts of well over 100 reqs/second), then Google would require 5,787 servers to serve these 10B reqs/day. If each of these servers were hosted at a cost of $100/month, then it would cost $579K/month to run the adservers needed.

Suppose these 10B impressions/day generated clicks at a clickthrough rate of .3% and an average CPC of $.10. Then each day Google would receive 30M clicks/day (347 clicks/sec), generating $3M/day ($34.77/sec), or 900M clicks/month, generating $90M/month.

Abuse:

Some webmasters create sites tailored to lure searchers from Google and other engines onto their AdSense to make money from clicks. These "zombie" sites often contain nothing but a large amount of interconnected, automated content (e.g. a directory with content from the Open Directory Project). Possibly the most popular form of such "AdSense farms" are splogs ("spam blogs"), which are centered around known high-paying keywords. Also many sites use free content from other web sites, such as Wikipedia, to attract visitors. These and related approaches are considered to be search engine spam and can be reported to Google.

Criticism:

Due to concerns about click fraud, Google AdSense has been criticized by some SEO firms as a large source of what Google calls "invalid clicks". In response, Google says that it "removes publishers from their partner network on a daily basis". Some disabled publishers have complained that the process is not transparent or accountable.

To help prevent click fraud, publishers can choose from a number of click tracking programs. These programs will display detailed information about the visitors who click on the AdSense pages. Publishers can use that data to determine if they've been a victim of click fraud or not. There seems to be many such commercial scripts available. An open-source alternative is AdLogger.

Google has also come under fire for not doing enough to combat the misuse of trademarks. Since 2004, Google had stopped prohibiting advertisers from bidding on any keyword, including trademarked terms.