AdWords vs. AdSense: 3 Differences to Know

Posted on January 22, 2024 | Updated on June 11, 2024

Digital advertising has been the bread and butter of many businesses. Its greatest leverage is the massive reach traditional or offline advertising doesn’t possess. One platform that dominates this area is Google, which offers AdWords and AdSense. What’s the difference between the two? Learn about AdWords vs. AdSense and which option is right for your business. 

What Is Adwords?

Google AdWords, now called Google Ads, is an ad program for advertisers who bid for ad placements to direct traffic to their websites. Who are these advertisers? They’re individuals, small and large businesses, non-profit organizations or entities with a product or service to promote. Most advertisers are entrepreneurs who run an e-commerce platform, provide a service, a software program or any online property to sell. 

As  Google is the largest media company in the world, Google Ads is the best tool to generate leads. Last year alone, the company generated $224.5 billion in ad revenue. Millions of advertisers contribute to this massive bottom line. 

How Does Google Ads Work?

Three players are involved in the Google Ads process — you as the advertiser, the searcher and the platform. 

To participate in AdWords, sign up as an advertiser by creating a business account. Then, choose a pay-per-click (PPC), cost-per-impression (CPI) or cost-per-conversion (CPC) strategy for the ad campaigns. The PPC or CPI method means you pay Google if a searcher clicks or sees an ad. 

Behind the scenes, advertisers bid on specific keywords where their ads would show up on the search engine results page (SERP). Bid amounts depend on several factors, such as the budget, how competitive the keyword is and the search volume. 

For instance, if you bid on the keyword “running shoes,” the competitors are likely huge brands like Nike, Runner’s World and Puma. From this fact, expect the keyword bid to be high. Bids can vary from a few dollars to hundreds, but you can set a budget for it. If you win the bid, Google will display your ad at the top of the SERP, the best ad placement visible to your target audience.

Advertisers use various strategies to get their ads in front of their potential prospects, such as bidding for the right keywords, using several ads and adjusting the bids. AdWorks is ideal for advertisers as it’s cost-effective. You only pay Google if it displays your ad.

What Is Adsense?

If AdWords is for advertisers, AdSense is for publishers. Who are the publishers? They are content creators, like bloggers and those who run news and forum sites. AdSense is the method of monetizing online content. For instance, if you manage a hobby blog where you share gardening tips, there’s an option to register in AdSense to turn it into an income-generating platform. 

How Does Adsense Work?

Think of your website as a real estate property and you earn by renting out a space to advertisers — this is how to leverage your content as a publisher. 

By pasting an ad code on the site, you can host relevant ads and choose where to place them and how they appear. For instance, you can put publisher ads between the content or the sidebar. 

If your website gets thousands or millions of visitors every month, advertisers with relevant niches will want to collaborate by bidding for ad space within your site. The highest bidder naturally gets the ad space and the right to display company ads on the site. Every time a site visitor clicks on these, you get a share from Google. 

Google sets requirements for publishers who want to participate in the AdSense program. They can deny your application if you don’t meet the prerequisites. 

Differences Between Adwords and Adsense

An essential thing to note is you can use both Google Ads and AdSense as an advertiser and publisher. After briefly learning about AdWords vs. AdSense, you’ll find some patterns that make them different. Here are some factors where they vary.

1. Purpose and Users

As explained, Google AdWords is for advertisers to promote their products or services across Google Network, while AdSense is for publishers who want to monetize their website content. While both goals boil down to money, AdWords is heavily focused on driving traffic to a site. AdSense is about showing the site visitors related ads they may find useful.

2. Advertising Design Flexibility

Both ad options offer flexibility in ad formats but with minor differences. AdWorks allows advertisers to control the formatting of the ad text, which is restricted in AdSense publishers. However, you can choose the type of ad format on the site, like a video, image or text. 

3. Payment Model

Ad users pay for every click, impression or conversion on the ads. Publishers, on the other hand, earn when readers click or see the ad. 

Additionally, advertisers also set a bid for keywords, giving them control over how much to pay per click or a thousand impressions. Publishers on AdSense receive a fixed amount every time someone clicks an ad. 

AdSense vs. AdWords: Which Should You Choose?

You can be both an advertiser and publisher, which should work if you handle two different sites or accounts. But if it’s only for a single site, you may risk suspension, as there’s a limit on using both Google products together. 

Your account may get suspended if you use AdWords to earn a profit by driving traffic to a landing site filled with publisher ads. The term for this is traffic arbitrage and it works by directing leads on your site through ads and converting the traffic into paid clicks with AdSense. 

Determine your goal or purpose to know whether it makes more sense to use AdSense, AdWords or both. If there’s a product or service to sell, using AdWords is the most logical strategy. If your site has valuable and unique content, you can monetize it with AdSense.

AdWords vs. AdSense: Both Products Can Benefit You

Both are tools to leverage and improve your business. They’re incomparable because they exist for different purposes. Know your marketing objectives to determine which will suit the business needs and allow you to achieve your revenue goals. 

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