What Is Google AdSense and How Display Ads Pay

What AdSense is

Google AdSense lets website owners earn money by showing ads. You place ad slots on your pages; Google fills them with ads from its advertiser network and pays you a share of what advertisers spend. Unlike affiliate marketing (where you earn on a sale), AdSense pays you for views and clicks on ads.

The auction behind every ad

Each time your page loads, Google runs a lightning-fast auction: advertisers bid to show their ad to that visitor, the highest relevant bid wins, and the ad appears in your slot. You never negotiate with advertisers – Google matches them to your content and audience automatically.

CPC, CPM and RPM

• CPC (cost per click): you earn when a visitor clicks an ad.
• CPM (cost per mille): you earn per 1,000 ad impressions, click or not.
• RPM (revenue per mille): your estimated earnings per 1,000 page views – the number you will watch most.

Google keeps a cut of each auction and pays publishers roughly 68% of display-ad revenue.

Key points

• AdSense pays you to show ads Google selects via a real-time auction.
• You earn per click (CPC) and per impression (CPM).
• Page RPM is the headline metric for how well a page earns.
• Advertiser matching is automatic; you just provide the ad space.