AdWords vs AdSense: All You Need To Know

March 19, 2017 by Jasmin Hukić

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Among many other things, Google is the most powerful advertising company in the world.

A big part of their income is coming from the two platforms – Google AdWords and Google AdSense.

No matter if you are an online advertiser, a blogger or you simply want to promote your business on the internet, difference and similarities between Google AdWords and Google AdSense is something you really should be familiar with.

In other words, these platforms are an inevitable part of digital marketing.

Therefore, I’m going to explain all you need to know about Google AdWords and Google AdSense.

Before we begin, you should understand this: both AdWords and AdSense can bring you many benefits but from different perspectives.

With AdWords, you are bidding for the place of your ads, whereas with AdSense you offer a place for others ads.

By the end of reading this post, you should be able to figure out which platform could bring you more benefits.

Let’s start.

Google AdWords

Google AdWords

AdWords is an auction system where you compete with other bidders for the Google Search Engine queries, popularly called keywords.

Normally, your goal is to find out keywords that your potential customers type in Google’s search box, and then to make sure that your ads show up in search engine result pages (SERP).

Besides that, by using Google AdWords you can bid for the place on the other web pages in Google Network, Shopping Ads, and Youtube videos.

How Does It work?

Once you find desired keywords, you need to create a campaign. There, you can set how much you’re willing to spend during the campaign, but also, how much a click is worth to you.

You’ll be able to bid high amounts if your customer lifetime value (CLV) is big enough.

Those companies who don’t have a high CLV are forced to bid less because, in the end, it’s all about ROI.

Based on your bid and several other factors like the quality of your ad, the related landing page, the relevance of the content and more, Google assigns your ad with a Quality Score.

On the photo below you can see that the maximum bid isn’t the exact amount you’ll pay. The maximum bid is the amount you’re willing to pay, but how much you’ll pay depends on the Quality Score and Ad Rank.

Actual CPC

The Quality Score combined with bid amount determines where your ad will appear on SERP for the keyword you are bidding for. This position is called Ad Rank.

There are many ways of optimizing a CPC, but generally, achieving a high Quality Score is the most important.

So, if your QS is better than QS from the other bidders for a particular keyword, you’ll have the highest Ad Rank.

Keep in mind that top position is not necessarily the one that will get the most conversions.

Sometimes you can get achieve conversion goals, from a 2nd or 3rd position where CPC will be lower, so you don’t really need to push to the top position at any costs.

How Much It Costs?

One of the best things about Google AdWords is that you pay only when someone clicks on your ad.

So, you set the budget for the campaign, but you are charged only for clicks. It can be surpassed by a 20% in one day.

Still, you don’t need to worry about exceeding your company’s marketing budget because once you set your daily limit your budget won’t exceed on monthly basis.

Here is the list of average CPC in different industries.

AdWords CPC Data

As you can see, in some industries you’ll pay more per click because they are more competitive and also because of their CLV.

Los Angeles Lawyer

For example, lawyers are very expensive in the United States, and for that reason, they’re able to bid more than those who work in the Dating and Personals industry.

Who Should Use Google AdWords?

Anyone who has target visitors browsing the Internet.

No matter if you’re selling products or services to other businesses (B2B) or consumers (B2C), Google AdWords works great for both models.

Let’s say that you are selling tires for trucks. Using Google AdWords you can promote your ads on other trucking industry related websites.

But not only on trucking sites, you can promote your product on articles that are about trucking. Even CNN has placed Google ads.

CNN Ads

This way you would be using Google’s Display Network, and you would get a chance to be seen from relevant people from your industry.

Here is another one.

Imagine that you’re a small business owner in Austin. Specifically, you’re offering home painting services. What would you do?

Simply target consumers who are searching for painting services on Google.

Home painting services

In order to place your ads on Google, you need to do keyword research and find keywords that might work for you.

How To Do Keyword Research?

The most important thing in running AdWords campaigns is finding the right keywords.

Now, everyone wants to be on the first pages. Knowing that big companies can pay $30 or $40 per click means that head terms and short phrases are almost impossible to compete for.

Insurance Keywords

However, long-tail keywords are less competitive and easier to bid for. In other words, it’s easier to reach better Ad Rank and your CPC will be lower.

One more thing, long-tail keyword tend to have higher click rate (CTR) because it’s easier to understand the intent of the search.

Long-Tail Keywords

All in all, I would strongly recommend you to go for long-tail keywords. Here are a couple of ideas how to find them.

Think about the searches from your customer’s perspectives and start typing them in Google search.

Automatically Google will give you suggestions for the query, which you can use as long-tail keywords.

Here is the example.

Imagine that you’re running a business about roofs. You would want to find people that type how to protect roofs in their search boxes.

Paste that in the Google’s search box and you’ll have something like this.

How to protect roof

There you go. You got several very relevant long-tail keywords suggestions that you can use to drive visitors to your site.

For example, you can write an eBook about protecting the roof from snow.

Once you drive visitors to the landing page, you’ll have lots of new leads and potential clients on your desk.

You can also use different tools for this matter. I prefer using Ubersuggest where you can find keyword ideas that are not available in the Google Keyword Planner.

Let’s imagine that you’re in the gardening business. Paste the garden flower and plants and click on suggest

Garden flowers and plants

and you’ll get 44 keywords suggestions.

Ubersuggest Keywords

Many of these phrases look very useful to me.

Bottom line – If managed properly, AdWords can be a very efficient tool for all kinds of businesses. If you have a tight budget for campaigns you need to do a research to find the right keywords. Long-tail keywords are less competitive and you can better understand the intent.

Google AdSense

Google AdSense

Google AdSense is probably the simplest way to make money online. It’s completely free, you only need to make possible placing ads on your website.

According to Livemans, Pete Cashmore (founder of Mashable) is the world’s top AdSense earner making $650K per month.

SimilarWeb says that Mashable has a total of 53.90M visits each month.

When we know that Mashable achieves 2.54 pageviews per visit, we can say they got 136.90M pageviews each month.

Mashable SimilarWeb

You’ll probably never have these numbers, but it’s a good overview how much you can earn.

How Does It work?

It’s all very simple.

Firstly, you need to create a Google AdSense account and provide the URL where you’d like place ads.

Google will review your application and if they approve it, all you need to do is to generate ads.

There. you decide what type of ad you want your site, whether it’s text ad, display ad or a combination of the two.

If you don’t want some ads on your site, you can alway block them. But, keep in mind that all ads are reviewed. They are safe and adjusted to your audience.

AdSense supports lots of different formats and ad types, and here’re top performing ad sizes.

AdSense Top Performers

When you figure out where you want to position the ads, just paste the piece of code there and that’s it.

How Do You Get Paid?

You earn money when the ads are clicked or seen, but you need to reach the minimum amount in order to get paid.

Here are the thresholds.

AdSense Thresholds

Simply said, when your AdSense starts earning, you’ll need to verify your identity. Google does it by sending you a letter with 4-digit PIN, but you need to earn $10 minimum.

After that, you’ll get paid when your AdSense sees the amount of $100.

Google AdSense is a platform with more ways to make money than you might be thinking.

For example, you can include a custom search engine, and after visitors search your site, they will see targeted ads next to the results.

People usually think that they need a website for earning with AdSense, but that’s not true. You can link your YouTube and AdSense accounts and start monetizing your videos.

How Much Money Can I Make From AdSense?

According to Google, for displaying ads with AdSense for content, publishers receive 68% of the revenue recognized by Google in connection with the service.

You’ve seen earlier that top earners are millionaires (if not billionaires). The fact is that AdSense paid almost $10B to publishers in 2015.

The AdSense Difference

However, if I tell you that global average earning per 1000 impressions is around 1$, it wouldn’t be saying much.

This is a simple question that doesn’t have a simple answer.

Top AdWords Industries

Instead, I will point out at the main factors that can affect your earnings from AdSense.

First of all, it’s geographic location. This refers to your visitors’ countries. Clicks from USA, Canada, and the UK are usually more valuable to advertisers.

Next, the industry your website belongs to will impact a lot.

The following photo shows you how advertisers in the Finance & Insurance industry are willing to spend huge amounts on advertising on Google.

Simply said, if you write articles related to this industry, you should see how your AdSense earnings grow up.

Also, website quality can make the difference. If you provide great user experience and valuable content on your website, you’ll get more traffic and become the place wanted by advertisers and you’ll see how your revenues increase.

Next, different ads format and positions will bring different results.

This is where you’ll need to experiment. Whether it’s size, shape, color or word, every detail matters. Don’t think, just test everything and compare the results in order optimize the type of ads on your site.

I just showed you that even mainstream media like CNN use AdSense, for example. There’s no a visited site that doesn’t use AdSense.

Finally, I’d like to say that I don’t recommend creating general sites or news sites. I think the best option is to create a specialized content.

Just think what you’re good at, and create the site about that topic.

Conclusion

Finally, let’s wrap up with the comparison.

Google AdWords is the service which you open when you want to increase the conversions on your site, or when you want to increase the brand awareness.

On the other side, when you want to earn money on your site, you can use Google AdSense which is the most popular monetizing service in the world. In fact, almost 2 million people have chosen AdSense.

However, both these services are connected. Although they look like opposite services, they are not.

You can place your ads on different sites by using Google AdWords.

That wouldn’t possible if there’s no Google AdSense and for that reason, I’d say that AdSense is some sort of AdWords upgrade.

Keep in mind that AdWords isn’t the only way of promoting your products – there are Facebook ads, for example.

As for AdSense, you can also try with eBay or Amazon affiliate program which are also great for website monetization.

Now, I’d like to ask you: Do you use AdWords or AdSense? What are your experiences? Share in the comments.

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