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The Adsense Business Model Explained

As part of our Business Model Explainer series, this post highlights one of the best monetization strategies for someone who is just getting started online: the AdSense Business Model.

Though this approach may seem fairly limited at first, AdSense can be scaled all the way up, with the potential to earn you tens of thousands of dollars a month once you understand what you are doing. By the end of this article, you will fully understand what Google AdSense is, how it works, and if it is the right way for you to make money online.

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What is Google AdSense?

Google AdSense is an ad network that allows you to place ads on your website, and profit when people click on the ads. The program can use keywords and other data to place ads relevant to the website content. The ads themselves are sourced from the advertisers using Google AdWords and their Display Network.

When you search for something on Google, there are usually two, maybe four paid ads in the search at the top and at the bottom. These ads are known as AdWords.

AdSense is the same thing, only instead of the ads appearing on the search engine page, they appear on an actual website. Usually they will be in blocks of text, but they can sometimes appear as pictures.

Here are a couple of examples of AdSense ads:

As you can see, AdSense ads are usually on the sidebar, or at the top of the website.

They can also appear within the actual content, and including ads in this way is one of the many means by which people can split test their website to get the best earnings.

If you are unfamiliar with what split testing is, it is just testing something new against what was on the website before to see if it will make more money. An example of this might be split testing an AdSense placement within the content of the site, and a placement on the right side of the site.

How Do You Earn Money with Google AdSense?

When people come to a website and click on an ad, Google earns money from the ad placement, and then pays the website owner a percentage of what is earned. The people creating these ads are marketers using Google AdWords, who have decided to expand their reach beyond just Google search and into what is called the Google Display Network (GDN).

The GDN is just a network of websites where the publishers have decided to monetize their sites using Google AdSense. Google reads their websites, finds out what they are about, and then targets website visitors with relevant ads, which come from the marketers who are using AdWords to associate their ads with certain keywords.

How you earn money goes like this:

1. Traffic to website
2. Traffic clicks on Google ad
3. Google charges the AdWord advertiser
4. Google splits what they charge the advertiser with you

This is why Google AdSense can be very lucrative for someone just starting out. You don’t need to target your ads to your audience, because Google will do that work for you.

Every AdWord ad works through what is called Cost-Per-Click (CPC); this is exactly what it sounds like. If the CPC is $5, it means that every time someone clicks on the ad, the advertiser pays Google around $5. CPC varies based on the popularity of certain keywords and other factors.

Out of that $5, Google takes a portion, and passes the rest on to the website owner who allowed Google to put ads on the website.

Because of this, many website owners who want to increase their revenue with Google AdSense will target words with higher CPCs so they can get a higher amount from the split between them and Google.

Examples of AdSense Sites:

Here are a few actual AdSense sites which you can explore, and can get a feel for how AdSense works. Some of these sites will not look like AdSense sites to you at first. This is because many only show images, instead of the traditional block text that is associated with AdSense.

Cydia Guide — The Small AdSense Niche Site

This is an example of how a small niche site looks when monetized via AdSense. There are millions of sites out there like this, and most of them talk about one very specific subject. In this case it is Cydia, a popular jailbreaking software for smartphones.

Sites like this can often start making money relatively quickly, but they usually cannot expand much beyond the $100-700 a month range.

The reason they can’t continue to grow is that most niche sites are set up with too much specificity. This website is about one thing, and one thing only — Cydia. This kind of specificity is great for a niche site. But this site would have trouble growing into an authority about different iPhone software because its very name, “Cydia Guide,” is a specific and well-known hack for smartphones.

Most niche sites are subject to this problem, and it’s one reason why they never become bigger authority sites.

Mashable — The Authority Site Model

Mashable is a huge blog, which talks mainly about tech news. They get millions of visitors a month and have developed their own bonafide publishing company, which people actually seek to be featured on.

That being said, Mashable is a huge AdSense earner. You’ll find AdSense ads throughout the website, bringing in millions of dollars in revenue for the tech blog.

Authority blogs, like Mashable, usually cover a broader range of topics than niche sites. And because of this, their earning potential is a lot greater than that of niche sites.

The chief drawback to the authority site is that they can often take longer to build. Plus, your content needs to be better and more valuable, which can lead to a need for higher investment in skilled writers if you decide not to write the content yourself.

The Pros of the AdSense Business Model

Now that you understand what the AdSense business model is and have seen a couple of example sites, it’s time to talk about the benefits of using this business model.

The first benefit is that it is a very passive way of making money.

Since Google does all the ad creation and targets your traffic with what is most relevant to them, all you have to do is drive the traffic to your website.

If you’re enjoying the passive income produced by AdSense, you don’t have to do the work of managing an affiliate network. An affiliate network, for those who are just getting started and aren’t familiar with the term, is a network that introduces advertisers (people with offers) to publishers (affiliates), in order to promote offers.

Managing affiliate networks can be a huge hassle. Many affiliate network offers cap out after a certain amount of sales, and some affiliate offers are short-lived and are then taken out of the network. When you use Google AdSense, you never have to worry about these problems, and so you know that you will have an offer to show your visitors every time someone comes to your website.

The other reason AdSense is so nice for someone just starting out is that all you have to do is focus on content. You don’t need to run any paid ads, learn any weird traffic strategies, or anything else like that.

All you need to learn is good, foundational keyword research, which is a skill that is going to help you regardless of where your internet marketing career goes.

Finally, you can make money in almost any niche using Google AdSense.

Thanks to the introduction of retargeting to AdWords, Google can show relevant ads on your AdSense site regardless of your niche and how obscure it might be.

With retargeting, when someone clicks on an ad, but doesn’t buy the product, they will subsequently see the same ad elsewhere on the internet. This means you could have an AdSense site about medieval warfare, but the actual AdSense ads that your site visitors see might be related to kitchen remodeling, if they had been looking at getting their kitchen remodeled earlier.

As a newbie, this is fantastic, as retargeting increases clicks considerably.

However, although there are a lot of benefits to Google AdSense, it comes with its own risks.

The Cons of the AdSense Business Model

One of the big issues with Google AdSense is that you will always make less than you would being the direct affiliate.

If someone was selling an expensive blender using Google AdWords, and they paid $5 per click, as host of their ad you would get a portion of that $5. However, when they make a sale, they will have made potentially hundreds of dollars.

Since you only get the money per click, and are not directly affiliated with the retailer of the product, you don’t get any money from the actual sales that the ads on your site bring about.

This is why you will need a lot of traffic to make good money with Google AdSense.

Outside of the need for high traffic volumes, there is always the possibility that your account will be banned. If your website’s entire monetization strategy is Google AdSense, you are putting all your eggs into one basket, and this basket can be taken away from you relatively quickly.

Google has been known to unleash their ban hammer on people fairly indiscriminately, so this is something to watch out for. While there are clear reasons why AdSense might ban you (such as having too intrusive ad blocks, camouflaging your ads so they don’t appear to be ads, or revealing how much you earn from AdSense publicly), the truth is that Google can ban you for any reason, or no reason at all. Plenty of people have been banned from AdWords and AdSense alike without ever really understanding why they were banned.

When you compare the Google AdSense business model to other models, though, you will find that the Google AdSense model is the one with the least amount of risk, and the easiest to implement.

The only other business model that has a similar level of risk and is also newbie-friendly is the Amazon Affiliate Business Model.

When you compare this kind of business model with Amazon FBA, Dropshipping, Ecommerce, Apps, or any other online business model, Google AdSense typically comes out ahead of them all in terms of safety and ease of use.

To make the most of it, you just have to accept that you will likely earn less than you would with other, more complicated monetization strategies.

What AdSense Website Buyers Need to Know

The first thing someone looking at buying an AdSense website needs to know is that these kind of sites are very easy to manage. If you are just starting out, using this model is probably the easiest way to have a portfolio of websites all earning money, but with the least amount of time involved.

Another thing buyers should be aware of when buying these kind of sites is that they should focus on specific keywords. The best keywords for AdSense are typically those with a higher CPC, but this is not always the case.

Keywords with a higher CPC will often be more competitive in rankings and better at getting traffic, because other marketers want to benefit from their CPC. This is why it is important to learn about keyword research and familiarize yourself with Search Engine Optimization (SEO) if you plan on using organic Google traffic to drive visitors to your website.

Also remember that you will need a more than average amount of traffic to make a good amount of money than you would need with other affiliate programs. Luckily, you will be able to get more potentially money-making traffic thanks to Google AdWords retargeting, which will always be offering relevant ads to your visitors.

Looking to buy an AdSense website that is already producing a profit? Check out our marketplace. (To find all of our AdSense sites for sale, just filter by click on the “Monetization” tab.)

What Do AdSense Website Sellers Need to Know?

For sellers, selling an AdSense website that is making money is absolutely awesome, as these types of sites can sell very quickly.

They are newbie-friendly, meaning people who are brand-new to internet businesses will be actively looking for these very specific websites. AdSense sites can also scale into some insane amounts of monthly revenue for the website owner.

These two factors together mean that profitable AdSense websites have the largest buying audience of any other form of monetization out there. (Amazon affiliate sites are comparable, but AdSense sites tend to sell more easily.)

The other great thing about selling an AdSense website is that the migration is very easy. (If you don’t know what migration is, it’s the process of handing your website over to the purchaser.) Typically, AdSense sites only need to have their codes changed out from the previous owner to the new owner to start earning money right away.

Even though migration is relatively easy with AdSense sites, when you decide to sell your profitable website for a nice payday through Empire Flippers, we will handle every aspect of the migration process for you (including switching over the hosting).

One major thing for sellers to know when they decide to list their Google AdSense websites, is that most buyers want to see an AdSense site that has been earning for at least a year.

Why?

Most Google AdSense websites get all of their traffic from organic search (SEO). If your website has been consistently earning money for over a year, that means it has survived what could have been several Google updates.

It shows the buyer that they are buying a website that is in it for the long haul, not one built on bad SEO that will just fizzle out the moment Google decides to update their algorithms.

What Buyer Persona Best Fits the AdSense Business Model?

If you are not familiar with the Buyer Personas, you can check out the podcast episode we did on the subject here.

For every kind of monetization strategy out there, there is a certain kind of buyer that absolutely loves that particular strategy. Sometimes the best fit between buyer and site is for professional reasons, but sometimes it’s because of personal, lifestyle reasons.

Lifestyle Larry

Lifestyle Larry loves Google AdSense websites, because he really doesn’t have to dump all that much time into them. He knows he can leave the website for days, weeks, or even months and be sure that the website will still keep earning revenue for him.

Since most AdSense websites have SEO as their main way of getting visitors, there really aren’t a whole lot of tasks that Lifestyle Larry has to do to ensure the website will still make money.

It is not that this kind of buyer is lazy. They typically just want to work less and enjoy life more. They are all about investments like these because they enhance their lifestyle, rather than create more work.

Portfolio Paul

For the online entrepreneur with several websites, buying an AdSense website just makes sense.

They are easy to manage, they earn month after month, and they do not take a whole lot of time to operate. Portfolio Paul buys the website for similar reasons to Lifestyle Larry. But unlike Larry, Paul owns and manages several, potentially dozens, of money-earning websites.

This makes Google AdSense sites a good purchase for him, because they increase his overall portfolio quite considerably, but without taking too much effort.

DIY Dave / Newbie Norm

Throughout this entire article, we have talked about how great these kind of websites are for people just getting started with an online business.

So obviously, Newbie Norm needs to be mentioned here. AdSense is one of the best models with which to start learning how online businesses work.

Do-It-Yourself Daves also deserve a mention. For a beginner DIY Dave, buying AdSense sites just makes sense. He can dump hours into the website, do some real work to improve their SEO, and thereby increase the site’s revenues dramatically.

The only thing Newbie Norms and DIY Daves need to do to grow an AdSense website is add more quality content.

AdSense Growth Strategies

As with any website, there are ways you can grow your AdSense website’s earnings and profits. A lot of the skillsets you will learn through growing an AdSense website will also help you with other forms of monetization as well.

Let’s talk about the best growth strategies to make your AdSense website earn more profits.

Creating More Content

AdSense sites are usually content sites. If you want to grow your AdSense profits, then you should create more content.

A good way of looking at an AdSense website is to look at your website as a magazine. The more articles you have that would interest your audience, the more likely that they will come and read your website and click on your ads.

You do not need to be the writer to make this happen — most marketers outsource 100% of their content.

You can use services like:

• iWriter.com
• HireWriters.com
• Upwork.com

The first two are best for low-level content. You can also get good low-level content written through Upwork, but the nice thing about Upwork is that you can also find very skillful writers for your more important pieces of content.

You will also want to make sure that your content is keyword focused so you can drive more SEO traffic.

One of the best tools for finding good keywords is Spencer Haw’s software Longtail Pro.

Paid Traffic

While not typical for Google AdSense websites, you can attempt to drive paid traffic to your website via Facebook ads and other platforms. This can work very well if your website is social in nature, where a paid ad on social media could cause your ad to go viral, leading to an influx in traffic.

There are many people who make a lot of money by driving paid traffic to their AdSense websites.

If you are a Lifestyle Larry, please be aware this might not be a good solution for you as paid traffic does require daily monitoring.

Split Testing

Once you have drawn enough traffic to your website, you should start testing the best places to put your ad blocks.

Just rearranging the size or location of your ad blocks within your website could dramatically increase your earnings.

Here is a good article on how to go about split testing AdSense websites.

Resources to Learn More

As you can probably tell, AdSense websites can be very simple. This is exactly why they are so newbie-friendly. You can take your AdSense website and grow it as your own marketing skill set grows.

This is how some AdSense websites are able to earn $10,000-plus in monthly net profit. That can be your website if you apply yourself, learn as best as you can, and implement as fast you can.

For more resources, there are two blogs I highly recommend when it comes to learning specifically about growing AdSense websites:

• FatStacksBlog.com
• RankXL.com

Of course, if you want more information from us specifically on how to build AdSense websites, check out our ‘6 month plan to $3k a month.’

While it is an old article, for the most part, the blueprint still holds true today. If you follow this plan, your AdSense websites are very likely to start producing profit.

We used to be in the trenches building AdSense sites — after all, we were the AdSense Flippers before we became the Empire Flippers!

Are you excited about starting an AdSense site? Take the guesswork out of it and buy a website that is already profitable — check out our current listings here.

Or maybe you are even more excited to sell your AdSense website for a big payday. Hey, we understand that.

If you want to get that process started, you can click here to sell your website with us today.