There are two different advertising options which Google offers that you can use to earn money; AdWords and AdSense.
AdWords works to sell your own product or service; you are responsible for creating ads to be shown next to search results or on relevant websites, and paying a small fee each time someone clicks on your ad. The goal there is to convert enough of those clicks to sales to make a profit.
AdSense is the flip side of the coin – you build a blog or website, and allow Google to place other people’s AdWords ads strategically. You get a portion of the fee the advertisers pay Google to show their ads.
Some webmasters do both – play the game of AdWords to drive traffic to their site, then reinforce the message with content built around AdSense, hoping that their outlay will be less then the revenue. Others concentrate on selling their own product or service using AdWords as one facet of their marketing plan, and still another faction specializes in what are known as ‘AdSense sites’ – which are built purely to take advantage of niche advertisers.
AdWords allows you to write relevant ads to be displayed next to search results that match your keywords. This is a good method for getting noticed, especially when you are new and haven’t managed to hit the top page of organic search yet. You can get an ad on the front page even if you haven’t managed to rank there yet.
Your ads will be shown next to relevant search results, as well as on content networks. Even Gmail users now see ads that pick up on keywords in their emails and show as a discreet banner running along the top of their inbox. The relevance is determined by Google, and you can also direct the placement of your ads more specifically by using tools which Google provides as part of the program.
Basically, with Google AdWords, your SEO is in your placement and in the actual writing of the ads themselves, as well as research for the best keywords and a careful handling of budget so that your cost per click stays affordable and your ROI is high!
Google AdSense means making your site part of the content network so that ads are shown on your site. You receive a portion of the cost per click the advertiser is paying! You can make some very good money if they have paid a high premium for clicks on their ad, so look at the tools Google provides for this system as well and see what advertisers are paying to estimate your possible revenue share.
The SEO involved here is all about having a worthy site, one that is attractive and relevant to the ads showing that have these high values. If you can attract high quality advertisers, you will make more money.
You can also make money with AdSense by becoming an affiliate. The means that certain advertisers will commit to using your site heavily for ads, and you receive a commission every time they make a sale at your site. This requires commitment and a high conversion rate, or advertisers will drop you.
You should always use links to strengthen your site and make it more attractive to Google and advertisers alike. Links from informational content on the web can be a good way to drive that customer traffic to your site!
Do plan on taking advantage of Google’s advertising programs to monetize your site – even if you only make enough on AdSense to pay for your annual hosting you will at least be making your site pay for itself!