Before signing up to adsense though, it's important to understand what you're signing up to. Many of the principles and strategies that I describe in this book make the most of the way that adsense works. If you can understand where adsense are getting their ads, how they assign those ads to web pages and how they fix the prices for clicks on those ads or for ad appearances on those pages, you'll be in great position to manipulate adsense in a way that gives you maximum revenues.

At the most most basic level adsense is a service run by google that places ads on websites. When you sign up to adsense, you agree to take the ads that google gives you and recieve a free each time a user clicks on that ad (or for each thousand ad appearances that ad receives on your site, depending on the type of ad google give you).

If you understand adsense, you will need to understand adwords.

Advertisers submit their ads to google using the adwords program. They write a headline and a short piece of text - and here's where it gets interesting - they choose how much they want to pay.

Advertisers decide on the size of their advertising budgets and the amount they're prepared to pay for each click they receive. Google then decides where to put those ads.

That makes adwords different to more traditional form of advertising. When an advertiser signs up to adwords, he has no idea where his ads are going to turn up. When you sign up to adsense, you've got no idea how much you're going to be paid for the ad space on your page.

Google says that it always assigns ads in such a way that publishers receive maximum revenues and advertisers get the best value for their money.

In theory then, you could just leave it to google to decide which ads to give you and at which price.

In experience though, that just cuts you out of a giant opportunity. You can influence the choice of ads that you get on your page, both in terms of content and in terms of price. You can certainly influence the number of clicks you receive on those ads. Google leaves it entirely up to you - and it's crucial part of difference between earnings that pay for candy bars and earnings that pay for cars.

Don't cut yourself short and make adsense as successful as possible.