Adsense Business Model Explained

Google AdSense is an online contextual publishing program where Google places ads from their Google AdWords program on your website, once you’ve signed up for the AdSense program and are approved for it.

AdSense adverts can be placed on any website or YouTube channel, including WordPress and Blogger blogs, and standard HTML websites, too. There’s very little technical skill required to get your AdSense publishing efforts off the ground.

This business model is ideal for anyone who wants to create a passive income which they can scale with a minimum of effort and cost. Most of the work involved in an AdSense business can be outsourced, leaving you to manage your employees, instead of trying to do everything yourself.

AdSense publishing offers you the opportunity to generate income very quickly – it can be incredibly lucrative, once you follow the right steps.

Google does have very specific rules about the types of sites they allow to participate in the AdSense program, so please carefully read their Terms of Service when applying.

How AdSense Works

The AdSense business model is a straightforward form of revenue generation based on something called contextual marketing.

Contextual marketing is techno jargon way of saying that if you allow Google to display ads on your website, blog or YouTube channel, then they’ll pay you when your visitors click on those ads.

How adsense works

Google realized a long time ago it was easier to allow millions of online publishers to create content for the Google Advertising network than to create all that content themselves.

The ads Google wants to display on your website have been paid for by advertisers using their Google AdWords program. These same advertisers are always looking to target new customers interested in their products or services.

Google matches their AdWords customers with websites dedicated to the same niche or market.

For example, you have a website or blog dedicated to outdoor living, with several thousand visitors each month. A small camping equipment business using Google AdWords as part of its marketing plan is looking to attract new customers.

The AdWords adverts created by this small business are then displayed on your website because their products are relevant to your visitors. These ads can be text, images or videos – the best type of ads to display on your site requires testing.

When somebody clicks on one of the Google AdSense ads displayed on your website the AdWords advertiser is charged for that click. Google then pays you a percentage of the click, and the rest is profit for Google.

This is then added to your overall account balance, which is paid out once a specified income level is reached, with the minimum possible payout being $100.

The money you earn is then sent to you either by check, or Electronic Fund Transfer (EFT), where the money is deposited directly into your bank account.

Participating in the Google AdSense program is free of charge; you simply need an active website, blog, or YouTube channel capable of displaying Google AdSense adverts.

Make sure that you have an active website before applying for the AdSense program because it speeds up the approval process.

How To Make Money From AdSense Publishing

There are a number of factors which come into play when making money with an AdSense business. Obviously, your website will need traffic (website visitors), which come from Google, Bing and other smaller engines.

This is free/organic traffic which you haven’t paid for but may require that you target specific keywords as part of the development of your site, blog or YouTube channel.

You will also need to make sure your online property is optimized for the search engines, a process referred to as search engine optimization (SEO).

The keywords you target are an extremely important part of your business plan, because certain keywords are more valuable than others. The value of a keyword is based on its CPC (Cost Per Click), or how much the advertiser paid for the click in the first place.

Basically, all keywords can be profitable, but some are more profitable than others.

When choosing keywords you can select a keyword with a lower CPC but a high number of searches, or you can choose a keyword with a higher CPC but a lower number of searches.

The keywords with a lower CPC might only generate 2c or 5c per click, but you get several dozen clicks per day because there’s not as much competition for that particular keyword.

For keywords with a higher CPC, you might generate $1.00 per click, but competition for these keywords can be extremely high, leaving you competing with much larger publishers.

Generally speaking, you can expect the most profitable keywords to be in very competitive markets.

Both approaches to keywords have their own benefits, but only testing different keywords in different markets will teach you what works best for you.

Building a profitable AdSense business based around a single website is possible, but that will require you to create and promote what’s called an authority site.

An authority site will have hundreds, if not thousands of pages of content. Authority sites should be an outstanding source of information in a given market, attracting hundreds of thousands of visitors from around the world.

If you feel you don’t have time to build an authority site then you do also have the option of creating a number of niche or micro AdSense websites. These are usually 5 – 25 pages in size, and are narrowly focused around a handful of keywords with a worthwhile CPC.

Niche AdSense sites require less time to put together, and less content for them to rank in Google.

To a certain extent running an AdSense business can be a numbers game in that not every AdSense site you create can be guaranteed to be a commercial success, even when you plan it out to the smallest detail. That’s why it’s usually a good idea to create 2 – 3 AdSense sites at the same time, increasing your odds of success.

How Much Can I Make From AdSense

Adsense account stats

There is no upper limit to how much money you can make with an AdSense business – it all comes down to choosing the right keywords in the right market, or vertical.

Alternatively, if you have an existing website with thousands of visitors each month AdSense can provide you with an almost instant income stream.

Documented examples exist of AdSense publishers earning upwards of $500,000 per month from their websites, with many advertisers earning anywhere from $1,000 – $20,000 per month.

You’d assume that the biggest AdSense payments come from huge authority sites, but in the real world of AdSense publishing groups of smaller niche sites are also capable of earning vast amounts of money.

If you take the example of operating twenty AdSense sites, with each site earning $200 per month, your income would be $4,000 per month from that portfolio.

$200 per month is a modest income goal for a website when you choose keywords with a relatively high CPC i.e. it’s entirely achievable.

The real magic of an AdSense business is that it can be as big or as small as you want it to be. So, if you have an income goal of just $500 per month then that’s entirely achievable.

If, however, you have an income goal of $10,000 per month that’s also achievable, it will just take more time and effort.

Examples of AdSense Publishing In Action

A picture speaks a thousand words, so it’s best to see some examples of what profitable AdSense sites looks like:

Paintsplashes.com

Example of adsense niche site

This is a keyword-focused niche AdSense site which is capable of generating around $500 per month from just twenty pages of content. The content on this site is evergreen, so it rarely needs to be updated – another hallmark of a great AdSense site.

PerezHilton.com

Perezhilton.com Adsense units

A celebrity gossip site can generate money from Google AdSense? Yes, and the Perez Hilton site is proof of that.

This site doesn’t focus on using keywords to generate traffic. Instead, it relies on insider gossip and celebrity scoops to attract a massive amount of visitors every day. The net result for Perez is an AdSense income of at least $60,000 per month.

Homeofficebuddy.com

Home offic buddy adsense site

This AdSense site focuses on the subject of setting up your home office, and is capable of earning in excess of $1,000 per month in AdSense revenue. The site was set up several years ago, and has had very little content added to it since 2010.

Mashable.com

Mashable.com Adsense revenue

Another perfect example of an authority website in a popular niche, that’s also generating $250,000 per month from Google AdSense. Again Mashable doesn’t focus on specific keywords but features all the news you might want in one single place, with a slant towards geeky and popular news stories.

These examples clearly demonstrate that even smaller AdSense sites are capable of making a return on investment within just a few short months, with everything else after that being almost pure profit.

They also prove that the “AdSense authority site” model works very well, even if you don’t place any real focus on keywords research.

Startup Costs

There are minimal costs associated with starting an AdSense business. Becoming a member of the AdSense Publishing Program is free, so there are no membership or subscription costs involved.

Google also provides you with a basic keyword research tool, which you can use to evaluate potential markets.

In theory you can start an AdSense publishing business for almost nothing, but if you want to treat this as a business, and not just a hobby, then here’s a shortlist of what you’ll need:

  • Professional keyword research tool – from $39 per month to $79 per year
  • Reseller hosting package from $25 per month, or ideally a VPS solution for around $55 per month
  • A budget of $1000 to have one authority site, or several niche sites, created for you.
  • You will also need a search engine optimization budget of at least $500 to get started
  • A domain name costs $10, and you may need several of them
  • A commitment that you’ll treat this as a real business, otherwise you’ll never reach your goals

Best Adsense Training Courses

Project 24 By Income School

Income School - Project 24 Adsense training

Currently one of my favorite training courses for building and growing niche sites, Project 24 is perfect for beginners and intermediate internet marketers alike.

The course is a step by step roadmap that will guide you in every aspect of your online journey, from picking a niche to creating amazing content that readers (and Google) will love.

The course creators, Jim and Ricky are a lot of fun to watch and are also great teachers, so you will never be left scratching your head. They are also very active in the community portal (which includes an app for your phone), so if you have a question they are there to help.

One of the best things about this course is that Jim and Ricky actually share their personal websites with you. This is very unusual for “Gurus” as it sometimes results in copy-cat competitors – but it is EXTREMELY useful for newbie marketers as you can actually see what a profitable niche site looks like.

The course is a little on the pricy side at $449 for the first year and $199 for each successive year, but if you are serious about making money online then it is well worth the price.

How Long Will it Take to Make Money With Adsense Sites?

A properly researched AdSense website, with positive search engine rankings, can generate income in as little as seven days. If the website already has existing traffic then you will see profitable clicks in your AdSense Dashboard almost immediately.

Let’s assume you’ve invested roughly $1,500 in having a small portfolio of 5 AdSense websites created. If each of those websites generates just $1 per day in ad revenue then your investment will be repaid within 10 months ($5 x 30 = $150 x 10).

If those same websites generate $5 per day in revenue then your investment would be repaid within two months. So, as you can see real profitability is possible within just a few months of launching your AdSense publishing business.

The speed at which your AdSense websites generate income will depend on the competitiveness of the keywords you’re marketing towards, and how quickly you can get the site ranked in the search engines.

Or alternatively on how much organic/viral traffic you can attract to your website with your other marketing efforts.

Income from AdSense websites will increase gradually over time, especially if you keep adding content and building more links to the site.

With that being said certain types of AdSense sites can generate profit for several years without ever being updated.

Pros/Cons Of Adsense Business Model

Pros of An AdSense Business

  • It can be run from anywhere in the world, once you have an Internet connection and a computer
  • You can scale the business to whatever income goals you have
  • You can outsource the website design and content creation, leaving you to focus on generating income
  • AdSense sites can begin generating income in just a few weeks
  • This type of business requires very little maintenance on your part
  • A profitable AdSense website can be sold for 10 – 20 times the amount of profit it generates each month

Cons of An AdSense Business

  • You do need to monitor your search engine rankings on a regular basis
  • Adding fresh content to your site or YouTube model is recommended
  • You need to invest time and effort in keeping your AdSense properties ranked in Google
  • Maintaining a large portfolio of niche/micro AdSense sites can be extremely time consuming
  • You are relying solely on one income stream, which is a major business risk
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