Google’s reputation as the best search engine on the web is well-founded. Based on a complex formula of algorithms and search criteria, Google provides web surfers with a high relevancy, no hassle search experience.

Although many small business owners use Google regularly, few understand how Google turns a profit, and more importantly how Google can help turn a profit for their businesses. The secret lies in Google’s sponsored advertising programs – AdWords and AdSense.

AdWords

AdWords is Google’s program for advertisers. When you perform a search on Google, two sets of links appear. The first are called “organic” links. These links appear in the main section of the results screen and are listed in order of popularity and relevancy. There are tricks you can do to increase your ranking in the organic ranking, but you cannot buy your way to the top of this list.

The other set of links appear to the right of the main results section under the heading “Sponsored Links”. These links are Google’s AdWords and the link sponsors pay a set amount every time someone clicks on their link, which is why it is called pay-per-click (PPC) advertising.

The pre-determined amount the sponsor will pay for each click varies from a few cents to a few dollars. When you sign up for AdWords, you will first be asked to complete some preliminary processes (e.g. signing up for an account and composing your ad). After you have completed the preliminaries, you will be asked to list the keywords that will be used to determine the searches in which your ad will appear. Next, you will be asked to set a limit on the amount you want to spend for the ad on a per month and per click basis.

Once you have provided the appropriate information, you will be given an estimate of where your ad will rank in the list for specified searches. Google provides tools such as traffic estimators to help you adjust your bids until you achieve a ranking estimate you can live with.

AdSense

AdSense is similar to AdWords except instead of paying Google for your ad to appear on their website, Google pays you for their links to appear on your site. The way it works is that Google provides you with codes that will cause content relevant ads to appear on your site from other site owners. In return, you receive a portion of the revenue that Google earns when someone clicks on one of those links.

Many small businesses have used the AdSense program to generate enough income to cover their Google AdWords costs and then some. At the very least, it makes sense to check out AdSense as a potential source of revenue for your business.