Search ads that appear in the SERPs are a great option if you know there is a demand for your product and your audience is using search engines to satisfy it. Ads on the Google Display Network, also known as banner or display ads, are more visual, perfect for drawing attention while “renting” a space where your audience hangs out online. Google actually has another ad program they launched three years after Google Ads‘start. It’s called Google AdSense.
What is Google AdSense?
Google AdSense allows publishers to place ads on their websites and other “properties” in exchange for a “commission”. These publishers make up a part of the Google Display Network that advertisers can take advantage of through Google Ads. In the image below, the recipe website uses Google AdSense to allow 2 advertisers to place banner ads on their site. Google pays the recipe site for the success of these ads. (More on this later). Google AdSense is perfect for website publishers who are already getting traffic and want to monetize it. Read on as we review the main differences between Google Ads and AdSense, who are they targeting, and what is their cost structure.
Ads (formerly AdWords) vs. AdSense
While the Google Ads program is geared towards attracting advertisers, the Google AdSense program is geared towards attracting publishers. Advertisers use Google Ads to drive traffic to their sites, and publishers use Google AdSense to monetize their existing traffic. Here are some key differences between Google’s advertising options so you can make decisions about how best to distribute your ad budget.
Purpose of the platform Google Ads (search) Generate traffic to your own site from Google as a search engine. Google Ads (Display) Drive traffic to your own site from the Google Display Network of publisher partners, mobile apps, and videos. Google AdSense Drive traffic to other sites as a publishing partner for the Google Display Network.
Platform Strategy Google Ads (Search) You know your audience searches Google for your products or services and you want to appear in the SERPs for those queries. Google Ads (Display) Your audience may not know about your product or service and are not searching for it on Google. However, a visual ad can get their attention if it can appear on the sites where they hang out. Google AdSense Your site is generating traffic and you want to monetize it. You don’t mind “renting” real estate on your site to advertisers that your audience might find interesting.
Cost structure of the platform Google Ads (search) You pay a fee each time a user clicks on one of your ads. This cost per click (CPC) can vary based on your bid, your ad’s ranking compared to the competition, and your quality score. For this reason, the most competitive keywords can have a higher CPC. Google Ads (Display) You can choose the right price for your goals: pay per cost per click (CPC), cost per thousand impressions (CPM) or cost per action (CPA). CPC is better for generating traffic, CPM is better for generating insight, and CPA is better for conversions. According to Google, you bid on the location and “the winner of the auction pays the minimum amount necessary to beat the next advertiser in the auction.” Competition increases bids, so industry and highly-requested publications can cost more. Google AdSense Participation in AdSense is free and you receive a commission for clicks, impressions and other interactions that the ads on your site receive from users. For this reason, your audience, ad placement, and ad quality will determine how much you can earn from AdSense. As you can see from the table above, the cost structure depends on a number of variables. We’ll take a more in-depth look at it below, starting with Google Ads.
Google Ads (search)
Naturally, there is huge demand for the top ad rankings, so Google triggers an auction whenever there are at least two advertisers bidding on keywords that are related to search queries that users constantly enter into Google.
Advertisers can then sort the keywords and corresponding ad text and website into groups, choose the group they want to bid on, and choose their maximum bid. Google will then select a keyword from the advertiser’s ad group that it deems most relevant to users’ search queries and will enter it into the auction. However, a Google auction is not like your typical antique auction. They want to level the playing field when it comes to taking advantage of the size of their reach, so instead of the highest bidder always winning the auction, the highest ranked ad bidder Always Wins. AdRank is calculated by multiplying your maximum cost-per-click bid with your ad quality score, which is calculated by measuring your page’s relevance to the keyword, user experience, and click-through rate. This means that organizations cannot rank highest for whatever keyword they want just because they have the largest advertising budgets. Your content must be attractive.
Google Ads wants to incentivize the best advertisers to serve the best content on their search engine results pages, rewarding ads that have high quality scores with higher ad rankings and lower cost per click. Along the same lines, they also want to discourage bad advertisers from advertising bad content, so advertisers with low quality scores will generally only get a high ad position if they pay a huge cost-per-click offer. If they want to pay a lower cost per click, they have to settle for crouching at the bottom of the ad rankings. If you win a Google auction, your actual cost per click is calculated by dividing the ad’s second-highest ranking by its quality score, plus one penny. The only time you will pay your maximum bid is if you are the only bidder in the auction or if you bid the highest in the auction but have the lowest ad ranking. In this case, you will get the latest ranking of the ad.
Google Ads (Display) / Google AdSense
For display ads, as with search ads, advertisers bid for publishers’ ad space in the Google Ads auction. They bid on certain keywords, and if a publisher’s content has the same or similar keywords, Google will sell their ad space to the highest bidder and pay the publisher a small portion of the bid each time people click on the ad. on their website.
However, AdSense does not optimize the ads they show on publishers’ website for maximum return on investment, as Google Ads does for its search advertisers when they want to optimize their ad campaigns. So essentially, the amount of money a publisher can make from AdSense depends on how well they place the ads on their site and how well the advertisers can create their ads. Editors have control over the types of ads displayed, though. They can choose from text ads, display ads, rich media ads, and more. They can also customize the style of their ad or create their own, giving them the ability to change the size, color, text, background and border details of the ads displayed on their website. Additionally, they can only place three content ads, three link ads, and two search boxes on each of their web pages. Google Ads (both Search and Display) and Google AdSense are effective ways to generate income with digital advertising methods: the former as you drive traffic to your site, and the latter as you use your site to drive traffic elsewhere. Once you choose the right programs for you, you can begin your strategy and execution. Editor’s Note: This post was originally published in March 2019 and has been updated for completeness.