Google AdSense is a program run by Google Inc. that allows publishers in the Google Network of content sites to serve automatic text, image, video, or interactive media adverts that are targeted to site content and audience. These adverts are administered, sorted, and maintained by Google, and they can generate revenue on either a per-click or per-impression basis. Google beta-tested a cost-per-actionservice, but discontinued it in October 2008 in favor of a DoubleClick offering (also owned by Google). In Q1 2011, Google earned US $2.43 billion ($9.71 billion annualized), or 28% of total revenue, through Google AdSense.
Google uses its Internet search technology to serve advertisements based on website content, the user's geographical location, and other factors. Those wanting to advertise with Google's targeted advertisement system may enroll through Google AdWords. AdSense has become a popular company in creating and placing banner advertisements on a website, because the advertisements are less intrusive than most banners, and the content of the advertisements is often relevant to the website.
Many websites use AdSense to monetize their content; it is the most popular advertising network. AdSense has been particularly important for delivering advertising revenue to small websites that do not have the resources for developing advertising sales programs and sales people to generate revenue with. To fill a website with advertisements that are relevant to the topics discussed, webmasters place a brief HTML code on the websites' pages. Websites that are content-rich have been very successful with this advertising program, as noted in a number of publisher case studies on the AdSense website. AdSense publishers may only place three ad units per page.
Some webmasters put significant effort into maximizing their own AdSense income. They do this in three ways:
- They use a wide range of traffic-generating techniques, including but not limited to online advertising.
- They build valuable content on their websites that attracts AdSense advertisements, which pay out the most when they are clicked.
- They use text content on their websites that encourages visitors to click on advertisements. Note that Google prohibits webmasters from using phrases like "Click on my AdSense ads" to increase click rates. The phrases accepted are "Sponsored Links" and "Advertisements".
The source of all AdSense income is the AdWords program, which in turn has a complex pricing model based on a Vickrey second price auction. AdSense commands an advertiser to submit a sealed bid (i.e., a bid not observable by competitors). Additionally, for any given click received, advertisers only pay one bid increment above the second-highest bid. Google currently shares 68% of revenue generated by AdSense with content network partners, and 51% of revenue generated by AdSense with AdSense for Search partners.
Oingo, Inc., a privately held company located in Los Angeles, was started in 1998 by Gilad Elbaz and Adam Weissman. Oingo developed a proprietary search algorithm that was based on word meanings and built upon an underlying lexicon called WordNet, which was developed over the previous 15 years by researchers at Princeton University, led by George Miller.
Oingo changed its name to Applied Semantics in 2001, which was later acquired by Google in April 2003.
Google launched its AdSense program in March 2003 and made it public in June of that year. Some advertisers complained that AdSense yielded worse results than AdWords, since it served ads that related contextually to the content on a web page and that content was less likely to be related to a user's commercial desires than search results. For example, someone browsing a blog dedicated to flowers was less likely to be interested in ordering flowers than someone searching for terms related to flowers. As a result, in 2004 Google allowed its advertisers to opt out of the AdSense network.
By early 2005 AdSense accounted for an estimated 15 percent of Google's total revenues.
In 2009, Google AdSense announced that it would now be offering new features, including the ability to "enable multiple networks to display ads".
In February 2010, Google AdSense started using search history in contextual matching to offer more relevant ads.