Adwords vs Adsense: What is the difference?

Adwords vs Adsense vs Google Ads!  Oh my!

Adwords vs Adsense: They’re both Google products, what are the differences between them?

Let’s start off by saying that Adwords and Google Ads are the same thing.  Now that we’ve gotten that out of the way…

Long before blogs were the rage and the internet was much less hectic than it is today, Google, the company that never rests, was secretly preparing something that would forever change the way people and businesses used and interacted with the internet.

And among all of Google’s revolutionary products, none has been more popular or generated more income than its advertising platforms, Adwords and Adsense.

Statistics show that Google has a 75% search market share and generates 71% of its revenue from ads.

Because of the ubiquity of Google’s advertising platforms, you’d think that all of Google’s products are unique and the first of their kind.

But this isn’t the case for all their products.

Although Adsense was revolutionary, it originally wasn’t Google’s idea. Or at least they weren’t the first to announce it.

Applied Semantics had announced its service and already called it Adsense in October 2002.  But former Googler, Paul Buchheit, claims that the idea was talked about for a while at Google before they finally launched their prototype contextual targeting ads late in 2002.  And since Google released its program around the same time, it supports the theory that they had at least been thinking about the concept just like Paul Buchheit claimed.

Google had deep pockets, and they did what Facebook recently did with Whatsapp and Instagram; they bought the company and then incorporated some of its technology into their existing ads program.  They then proceeded to call their ‘content-targeted advertising program’ Google Adsense.

Google Ads: the evolution story

Unlike Adsense, Google Adwords, when it first launched on October 23rd, 2000, really was the first of its kind.  It was a revolutionary idea, one that changed the dynamics of internet advertising.

This two-pronged hook would meet the needs of both businesses and consumers.  It gave businesses the kind of exposure they couldn’t have gotten otherwise. It also simultaneously made it much easier for consumers to find the products and services most suited to their needs.

As the landscape of the internet has been remolded and reshaped by advances in science and technology, and as consumer behavior has adapted to these changes, Google deemed it fit to upgrade their tools and platforms to accommodate these changes.

They felt a change was necessary to adapt to the new digital landscape and to provide a comprehensive and intuitive platform for marketers who use Google products.  In an article, Alessandro Antiga, head of Brand, Digital, and Creative Operations at Google, gave some reasons why Google rebranded.  One reason they rebranded was “to help brands agencies, publishers, and advertisers better meet people’s needs by delivering meaningful and relevant messages.”

Over the years, Google’s customers had indicated that they wanted a single platform to “create, plan, buy and measure their campaigns.”  Marketers who used Google’s tools were already using products like “Double Click and Google Analytics 360 suite products in tandem to create campaigns and measure their impact”.

This trend was even supported by statistics

In an interview that Google conducted, of almost 1,000 marketers, a staggering 80% said they wanted to use integrated marketing and advertising technology from a single vendor.

This wasn’t the only reason too.

Sridhar Ramaswamy, Google’s head of ads and commerce, also stated that they wanted to change people’s perspectives about the platform to more accurately represent all of Google’s offerings.

Sridhar, in an interview with Search engine land, said that ” with Google Ads as opposed to Google AdWords, it is moving the imperceptible default opinion that you get as an advertiser when you hear ‘Google AdWords’ … you think, ‘Oh, Words. Search.’ It’s a slight cognitive dissonance to all the other great things that we are doing in terms of both the format and surfaces these ads can show. And so, Google Ads, in our opinion, is a much more straightforward representation of what Google advertising can provide. It’s that simplicity and alignment of the core message from the first instant you hear the name, which is the goal.”

If you’re wondering, Google didn’t change its core functions either.

Managing Director for platforms, Dan Taylor said that although its look and feel the change, the core functionality of Google Ads would remain the same.

Now that we’ve looked at some of the rich histories that make each platform unique, we’ll proceed to examine how each platform works and how businesses and marketers alike can use both platforms to their advantage.

What are Google Ads?

Adwords, in Google’s words, is a program that enables advertisers to creates ads which would appear on Google search results pages (SERPs), Google’s display network, Youtube, Gmail, and a network of partner sites.

The ads also appear in different formats, too, like text, shopping, display, video, and app installs.

Google Ads, depending on how you use the program, has the potential to be laser-like.

It can target users based on demographics like age, gender, location, sex, and a myriad of other demographics.

Careful consideration of demographics is crucial to the success of any campaign because, after all, there’s no point displaying your juicy steak ads to cabbage-consuming, kale-crushing vegetarians.

Doing so is contrary to what common sense would suggest.

Who can use Google Adwords?

Because of the almost nonexistent barriers to entry, most businesses can use Google Ads.

The platform itself is built primarily for businesses that either has a brick and mortar store or an online presence, or both.

Before we explore how Google Ads work, we’ll take a sneak peek at Google’s sneaky method of ensuring that advertisers continue to spend fantastic sums of money on ads.

Sneak peek at Google’s sneaky methods

When Google first displayed Ads, they appeared on the right side of the SERPs. But Google discovered that placing ads above the fold would increase clickthroughs, which would invariably result in more money.

Through A/B testing, they found ways to make ads even more inconspicuous.

Ads were previously yellow, and they would also have text alongside to emphasize their ‘adness.’

But as Google continued to test, and as users became more biased towards organic results and learned to blatantly ignore ads in favor of organic results, Google began finding even more subtle ways of displaying ads.

They went from using yellow to a subtle green, which more closely resembled organic results.  These days although Ads still look like ads, they don’t scream ‘ad’ like the older ones used to.  And you likely wouldn’t know if you were clicking on an ad or an organic search result.

While I may call this camouflage “sneaky” the truth is, advertising has always evolved to appeal to its target market.  It’s the nature of marketing and we should all be following this trend.  Design can make or break your ad campaign.  So take note and give your customers what they want!

How Google Ads work.

Any business, a remodeling company, for instance, can advertise on Google Ads by creating ads that are optimized for keywords like ‘cost of remodeling in SA’ or ‘tools for remodeling.’

Businesses can optimize for any keyword, depending on whether they’d like to reach a local audience or a larger international one.

But because of the high earning potential of the Google Ads program, many advertisers and businesses jostle for the most competitive keywords that rank the highest on the first page.

Google helps businesses more closely match their products and services to the most relevant audience by letting them bid for keywords and ad space on Google’s SERP (search engine results page) or display network.

In return, advertisers pay every time a user clicks on an ad. In other words, they pay per click, hence the acronym PPC.

However, whenever at least two advertisers bid for keywords that a lot of users enter, Google triggers an auction.

A Google auction is not like a typical auction where the highest bidder always wins, and the auctioneer rattles on like a machine gun. In a Google auction, instead of the highest bidder winning, the bidder with the highest Ad Rank wins.

This strategy is simple, click fraud – the process of repeatedly and intentionally clicking on an ad in order to increase revenue, whether by automated or human means – is common.  Auctions based on quality is one way in which Google can try and mitigate this.

What is Ad rank?

Ad Rank is Google’s system of determining whose ad is the most relevant. Ad Rank is calculated by multiplying the maximum cost per click bid with the quality score of the ad.

And the quality score is calculated by factoring in things like a page’s relevance to the keyword, clickthrough rate, and user experience.

Google triggers this auction to encourage and reward advertisers with the most relevant and most engaging content.  They also reward these advertisers with higher ad rankings and lower cost per clicks.  They, however, do the exact opposite to advertisers whose content isn’t so engaging.

Advertisers with low-quality scores will only get a high ad position if they pay a ridiculously high cost-per-click bid. If they cannot afford a higher cost per click, they have to settle for rock-bottom ad rankings.

Adsense works a bit differently.

What is Adsense?

Unlike the case of Google Ads, where businesses have to pay Google to advertise on the SERPs,  Google’s Adsense program pays webmasters (those who own websites) to display other Adwords ads on their sites.  Native ads and text ads are the most common.

In return, Google pays the webmasters a certain percentage of the Adwords average cost per click whenever users click on a particular ad.

To explain better, Adsense is one way that Google advertises businesses. So, other webmasters that have partnered up with Google (through Adsense) get a cut of the money that businesses pay through Adwords.

Just like in the case of Google Ads, the webmaster is paid per click or thousand impressions depending on the ad.

The webmasters have total control over where the ad appears on their website, the dimension, and the general appearance of the ad.

Who is Adsense for?

Adsense is a website monetization tool.  If someone is scrolling through social media, sees an article that pikes their interest, clicks on the article ink, sees a relevant ad and clicks on the ad, they have been part of an Adsense monetization funnel. Congratulations!  They have helped bolster the economy and further the success of many small businesses.

Adsense works best for those with a sizeable audience. The emphasis is on sizeable because Google Adsense isn’t as profitable as other networks.  But even if the payout is small, it’s a start, so if you want to monetize your website, sign up for Adsense.  Period.

How does Adsense work?

Just like in the case of Adwords, advertisers bid for a webmaster’s advertising space in Google Adwords, and the one who bids the highest gets the space.

And the good news is that Google takes care of the billing so that webmasters can just sit back and watch the cash roll in. Literally.

The Google Ads platform allows advertisers to optimize their ads for the greatest ROI and click-through rate, but it doesn’t afford Adsense users such a luxury, as the position of the ad, it’s coloring, and the size are all at the webmaster’s discretion.

The whole process is automatic too. Businesses that enable the display network through their Adwords account will automatically have their ads displayed on relevant third party websites that have signed up to Ad-sense.

The caveat, however, is that unlike in the case of Google Ads, where there are almost non-existent barriers, and almost everyone can sign-up, Google Adsense is more rigorous.

We’ll get to that in a bit.

Adwords vs Adsense: Which should you use?

There are situations where Adwords is suitable and when it isn’t. The same goes for Adsense too.

As we’ve previously established, there are no absolutes when it comes to using Google’s advertising platforms, since they solve different problems for different people.

Adsense is for webmasters who want to sell advertising space to businesses, while Google Ads is useful for businesses that want to advertise on Google’s display and search network.

Although businesses can use both the search and display networks for advertising, they are best used in tandem for the best results.

When users see a display ad on another website, there’s no intent to buy; they’re just looking for helpful information. The logic is to use display ads first to create awareness of a product.

This works out well because it is much cheaper to advertise to a new audience through one of Google’s partner sites compared to the high CPC of using Google Ads.

Businesses can use the display network to increase brand awareness and to create brand recognition, thereby creating demand

With Google Ads, there is already search intent and demand, so Google Ads helps you to convert users who are already aware of your brand into paying customers.

Google Adwords vs. Adsense: The sign-up process.

Signing up for Google Ads is so simple and uncomplicated. All you need is a Google account.

You sign in to a Google Ads account using the same email address and password you would use for your Gmail account.

As we have established earlier, signing up for Google Adsense is much more rigorous and complicated than that.

To get a Google Adsense account, you would need to provide the following information:

  • Your website URL
  • Language
  • Account type
  • Your name and address
  • Phone number

Even after providing all the information required, you don’t automatically become a part of the Adsense Program.

Google still has to evaluate your site and approve of you.  Google is trying to prevent consumers and advertisers from click-fraud and any other unsavory practice.

If they do that, you will then be given a code that you can use to display ads on your website. You may then customize the ads as you so desire.

As a consolation, despite the long and arduous process of signing up, Adsense is free to use, and you’ll hopefully earn boatloads of money.

There are no rules when it comes to advertising with Google’s major advertising platforms. You just have to outline your goals and make sure that you are using the platforms to achieve those goals.

And if the whole thing becomes too complicated and convoluted, and you find yourself out of your depth, hire a digital marketer. Or a digital marketing agency.

Innovation Exchange