Google started as a simple but powerful search engine with a minimal homepage layout featuring nothing but a search bar and the company’s distinctive logo. The company has certainly come a long way since then and today, it’s an online behemoth. Its additional Web services include email, Web based tools, SaaS applications and a variety of other products.
What distinguishes Google is the simple way it approaches everything it touches, like its simple logo still alone and unadorned on the main Google search page. Its popular two part advertising program is no different. Split into Google AdSense and Google AdWords, these seemingly unassuming features have really gotten Google where it is today.
But some people still don’t quite get the Google AdSense and AdWords models. Many ask themselves, “what is the difference between AdSense and AdWords” and don’t really understand them. Below is a simple explanation of what each does and what makes them different.
The Difference Between AdSense and AdWords
The first thing to understand is that Google’s search engine makes no money on its own, at least not directly. The search engine may have redefined, for a whole generation, how information is researched and retrieved. But it’s Google AdWords that helps Google make all the money that enables that free search tool to operate.
Meanwhile Google AdSense helps Google distribute the ads for those AdWords campaigns to online publishers (anyone with a website and AdSense code) and to its partner networks. Google AdSense is also available on mobile, tablets, and on YouTube — Google’s premier video network. Gradually, the company has even started showing its ads via its other products like Gmail.
But how, exactly, do Google AdWords and Google AdSense work?
There was a time when businesses and everyone else who needed to promote or market anything had only a few choices. One was to approach leading newspapers (local, national, or global – depending on what customers they needed to reach) and buy an ad. Newspapers decided what to charge for their ads based on circulation — how many thousands or hundreds of thousands of readers they had. Generally, the greater the circulation the higher the cost for running the ad.
Enter Google and now the game has changed.
The search engine doesn’t simply charge for the number of people reading a page. Instead, it displays your ad on a page next to information specifically relevant to your product or service. And it charges either when your ad is displayed on users’ screens or when a prospect actually clicks on your ad and sees your offer.
The company even allows businesses and others to open free accounts with Google AdWords without obligation and provides tools to create ads. These tools help advertisers choose relevant keywords. And the keywords allow their ads to appear alongside Google’s main results each time a user searches for something related.
For instance, if you search on Google for “New York Service apartments” (as pictured above), you’ll see both organic results and paid ads associated with those keywords. Users then choose the content most relevant to their search. That could be websites or news stories related to the topic or ads offering related services like moving or rental.
Google gives businesses the benefit of reaching a huge number of users seeking information related to their products or services. But it also allows users to find what they are looking for quickly and efficiently.
Google AdWords is simple and efficient. It allows businesses to promote their products, services, or brands for as long as their budgets allow. Google gives businesses the option of paying for their ads on a CPM (Cost per Thousand Impressions) basis or on a PPC (Pay Per Click ) basis. It also allows businesses to run, maintain, measure, and track results from their paid campaigns.
Think of Google AdSense as a distributor for the ads Google AdWords sells. For all the businesses who pay to promote themselves on Google, Google AdSense helps place those ads in the most relevant locations. These locations might include the sites of individual bloggers who write about a related topic. They might also include an online publication, forum or online community where AdSense is displayed.
Google AdSense is free for online publishers. Once publishers sign up and submit their websites, Google evaluates the sites based on the overall quality of content. Approved publishers are then provided a code allowing them to display ads on their websites.
It’s up to the publishers how and where they display Google ads. Once they embed the code on a page of their website, Google starts automatically “serving” ads consistent with the site’s content. That’s where the “Sense” in AdSense comes from.
Here’s an example:
Let’s say you have a webpage specifically on the topic of “business insurance.” Once visitors arrive on your site, Google AdSense immediately starts working, displaying relevant content in ads. (See the image below:)
When visitors click on these links, two things happen:
- Google makes money through its AdWords program  charging advertisers a cost per impression or cost per click rate based on the number of times users either see or click on the add.
- Publishers make money with a share of what Google collects from the advertiser for the ads seen or clicked on from their websites.
Think of Google’s AdWords  and AdSense as two complementary parts of Google’s advertising program:
- One allows businesses to signup and buy ads to be displayed by Google across the Web alongside relevant content.
- The other lets Web publishers partner with Google to help spread that advertising by placing it on their pages for a share of the profit.
Difference  Photo via Shutterstock