AdSense in a Nutshell

Claude took a lot of notes during my lecture on Web advertising, but his daughters seemed content just to listen. After taking a short break, we resumed our discussion.

"That was a pretty good summary," he said, "and it explained a lot to me that I didn't really understand before. Now that we understand the basics, can we talk about AdSense?"

"Sure," I replied. "AdSense is interesting. Most advertising services are designed for large sites that get a lot of traffic. Typically, there's some human interaction involved, where the advertising service works closely with Web site owners to select the type and placement of ads. Dealing with small sites simply isn't economically feasible in this scenario."

"With AdSense," I continued, "Google created an advertising service that is almost completely automated. This is why Google can offer the service to almost anyone who wants it, including small sites like the one you're going to build."

"So how exactly does it work, then?" Anita asked. "It sounds like there's a lot of complicated programming involved."

I shook my head. "No, not for the Web site owners. For them, it's easy. Google does all the hard work." And I explained to them how AdSense works.

How AdSense Works

When you join the AdSense program, you become an AdSense publisher. It's an apt name because it really reflects what you'll be doing: publishing Google-supplied ads on your Web site (or sitesyou're not actually restricted to a single site).

The AdSense program is easy to understand. Here's how it works:

• After being accepted as an AdSense publisher, you get access to a Google-run Web sitewhich we'll call the publisher management consolethat lets you manage your AdSense account (Figure 2.3).

  Figure 2.3. The AdSense publisher management console.

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• Using the management console, you select the ad format and color scheme best suited to your site. It's very easy, and you can preview what the ads will look like without doing anything to your site.

• Google then generates some code that you paste directly into your Web pages. This code is written in a programming language called JavaScript, but you don't need to know the details; you just put the code on your Web pagesremember, there's no programming required to use AdSense! Embedded in the code are your publisher ID (your AdSense account number) and details about the kind of ads you want displayed on the page.

• Whenever one of your pages is displayed in a browser, the JavaScript code runs. (This assumes the browser has JavaScript enabledif not, no ads will ever be displayed.)

• The first few times the code runs on a particular page, no paying ads are displayed because Google doesn't know what the page is about yet. Public-service advertisementsads that Google offers free of charge to charitable organizations and that do not make you any moneyare displayed on the page in the meantime.

• Meanwhile, Google's computers fetch the page in order to analyze it. Normally, the page analysis occurs a few minutes after the JavaScript code runs for the very first time.

• Once the page has been analyzed, relevant ads appear when the page is displayed (or refreshed) in the browser. Each adhas a link back to Google. Encoded in these links is information about the publisher (you) and the advertiser.

• Whenever someone clicks an ad, the visitor's browser is sent to one of Google's Web sites to record the click using the information encoded in the link. Google then quickly redirects the browser to the advertiser's site.

• For each click, the advertiser is charged a fee, and part of that fee is credited to your account. You can use the management console at any time to see how much money you've made.

Of course, behind this simple process is sophisticated technology and clever programming. Not only must AdSense accurately analyze Web pages and match them to relevant advertisements, it must also detect click fraud and other suspicious activities. And of course, it needs to be up and running every minute of every day. Building an automated advertising service like AdSense is something only a few companies could manage, so you have to give Google credit for building it and letting you reap the benefits of that automation.

AdSense Patents Google has patents on several aspects of the AdSense program. If you're really curious about AdSense's original design, you can read the patent documents online at the U.S. Patent and Trademark Office's Web site. See www.memwg.com/adsense-patents for the links.

Where the Ads Come From

Anita wondered where the ads come from, which is a perfectly reasonable question to ask. After all, if there aren't many ads available to display, what's the point in using the AdSense program?

Most of the ads available to AdSense publishers are text ads from Google's AdWords program. These are the same ads that are displayed on Google's search-results page, where they're called "Sponsored Links." (Note that advertisers can choose not to have their ads displayed on third-party Web sites, so Google itself actually has a larger ad pool to draw from than the AdSense publishers do.) The ads are clearly separated from the search results, and Google has always said that the ads have no influence on how searches are performed.

AdWords

For a detailed tutorial of the AdWords program, go to www.google.com/ads/.

An AdWords text ad has four lines of text: a title, a two-line description, and a display URL. Conciseness is important, since the title is limited to 25 characters and the other lines (including the URL) are limited to 35 characters each. The ad also has a destination URL that isn't shown. This is the actual link that sends visitors to the advertiser's Web site.

Each text ad is associated with one or more keywords. A keyword is a word or phrase that represents or summarizes a key concept, idea, or attribute of the product or service being advertised. For example, a tire retailer might use keywords like "tire," "snow tire," "radial tire," and even brand names like "Michelin" and "Bridgestone." AdWords will even suggest related keywords to the advertiser, which makes selecting the right keywords even easier.

Keywords are important because an ad only appears on pages related to its keywords. Only a limited number of ads can appear on a given page, so Google uses an auction-based system that lets advertisers bid for the chance to show their ads. The bidding system has a feedback component to it to ensure that the ads with high clickthrough ratesads that are clicked oftenare given priority over other ads, even higher-paying ones. In fact, nonperforming ads are eventually dropped by the AdWords system in order to make room for the ones that get good response. Advertisers also set a daily budget to limit their advertising costsads are not shown for the rest of the day once the budget's been exceeded.

The AdWords program also supports image ads, but only for display on third-party Web sites. The keyword bidding system used for text ads is also used for image ads.

There are more text ads than image ads available through AdWords, mostly because Google does not display image ads on its own pages. Neither are AdSense publishers forced to display themby default, publishers get only text ads. A publisher can ask (through the AdSense management console) to receive both text and image ads, or image ads only.

How Ads Are Selected

"So how does Google know which ads to display on a page?" Claude asked me. "It doesn't sound simple." And Claude was right: It's not simple. But neither is it as hard as you might think.

AdSense matches ads to Web pages (also called content pages) using special algorithms developed by Google. Keywords are at the heart of those algorithms, as you've probably guessed by now, since the AdWords programthe source of the adsis itself keyword-based. Once a page's keywords have been determined, relevant ads are easily selected from the AdWords ad pool. So the real trick is figuring out the keywords for a given page.

Since AdSense is an automated system, the algorithms must determine an accurate set of keywords for a content page without requiring human involvement. Many of the details are actually revealed in the original AdSense patent application that Google filed with the U.S. Patent and Trademark Office. Here are some of the criteria used by the AdSense algorithms:

• The frequency with which a keyword appears within a Web page. The more times a keyword appears on the page, the more relevant it is to the page content.

  Nix the Pix

  Web pages that are primarily graphics and multimedia, not textas on a site for an art studioare difficult for AdSense to analyze and may not return relevant ads. Important keywords should always be included as text on your pages.

  
  

• The infrequency with which a keyword appears across a set of Web pages. The more common the keyword, the less relevant it is to the page content.

• The results of analyzing other pages in a set of Web pages, including pages that link to or are linked from the page. The keywords of previously analyzed pages may be relevant to the current page.

• The title of a page. Keywords in the title are assumed to be more relevant.

• The text in the links from other pages to the page. Again, keywords in such text are assumed to be more relevant.

This list is by no means exhaustive, but it shows you the kind of analysis that AdSense does in order to place relevant advertisements on a Web page. The algorithms aren't always right, but Google adjusts them from time to time in order to achieve better accuracy.