Fair warning: this is an extreme beginner’s guide to AdSense! You can skip this one if you know what it is.

Anybody and everybody who runs a website needs to sign up for Google AdSense. You’ve all seen the ads strewn across just about every site you’ve been to on the Internet, maybe you’ve clicked on them, maybe you just don’t even notice them.

It’s even possible that you’re under the impression that the people who run the site just put them there to try and offer you some pointless service or product in hopes that you’ll shell out tons of money. The reality is that these ads are not chosen by the webmaster and they do not make you pay large sums of money when you click on them.

The great thing about Google AdSense for both the webmaster and the company doing the advertising is that the ads are picked based on the content of the page you find them on. So as an example, if you’re reading a blog post about cars, the ads you’ll see are related in some way to cars. These can range from companies advertising car washes to car parts or to buying a car in general.

For visitors, this enhances the user experience in that they can view related offers, services, products and information based on the things they’re already looking into.

For webmasters, this enhances CTR (click-through ratio). What CTR simply means is how many times someone clicks on a link. Going back to our example about cars. If you posted a blog about cars and then manually inserted an ad about how to get a free trial of NetFlix, your visitors are less likely to click that ad because NetFlix has nothing to do with cars. This produces a lower CTR and that’s not a good thing when running advertisements.

Who pays for these ads?

Anybody wanting to advertise. Let’s say you sold car parts and you wanted an ad for your website to appear on search results and websites that are related to cars (and more specifically car parts). You would buy adspace from Google through another service called AdWords and you initiate a bid price for specific keywords. The bid price is how much you’re willing to pay for each time someone clicks on your ad. More on this in another post.

How much can I get paid?

This is a very large range that can be anything from $0.01 – infinity (technically) per click. The reason for this is that not every ad pays the same since not every keyword is worth as much to an advertiser. See more information on Google AdWords. So, you can paid every time someone clicks on an ad that’s displayed on your site. This money is then stored in your AdSense account until you reach a certain threshold and then Google sends you a check.

Are people really making thousands with AdSense?

Of course! However, these are people with websites that draw in many thousands of visitors. To give you an idea, take a sample CTR rate of 4%. This is a low rate, but for most sites, it’s considered normal. Applying some simple math assuming your site has 1000 unique visitors a month and you get about 40 click-throughs. If each click was worth $0.05, you just made $2.00! Of course, this number highly changes drastically based on how many clicks actually got counted, how much each ad cost, etc, etc. There are also many days when you don’t get any clicks. The most important thing to have on your site is traffic! Some websites have even written complete ebooks based on ways to increase you AdSense earnings. I read one in particular that helped me triple my returns in a matter of weeks.

How do I get started?

Simply go to Google and signup! It’s completely free to use AdSense and it does not cost anything to run it, but you do need a website to place your ads. Beyond that, you need content. Otherwise the ads won’t even show.

Is there anything else I should know?

AdSense revenue can now be earned through RSS feeds, search results, parked domains and mobile content. You can learn more about each of these when you sign up. In further guides on my site, I will explore these areas of interest.