How Ads on the Internet Work

Blogs, websites, and other platforms where content creators showcase their work, actually depend on ads for revenue.

Well, not all of them technically, since there are other methods to earn as well such as affiliate marketing, but a large proportion of website owners earn through ads.

Many people, who are not even tech enthusiasts, are already aware of this. If you didn’t know about it until now, don’t worry. By the end of this article, you might not become a master in digital marketing, but you will surely understand this “adverthesis.”

What are Ads?

First, let’s take a look at what an ‘Ad', short for ‘ Advertisement', means. As you might know, generally, advertisements are a part of marketing strategies that promote a brand, a product, or any service through a medium.

If you see an ad for an iphone on the TV, then it means that the brand Apple is promoting its product (here, a phone) through a channel you are currently watching on the TV.

If we specifically look at the ads on the internet, it’s the same. There are ads placed on websites, blogs owned by a blogger or website holders, of a company promoting its product or service or the company itself.

The key point is to persuade the potential customer, who is a part of the traffic of that website, to click on the ad and convert him into a real customer.

The Two Heads And the Whole Process

An advertiser and the publisher are the two main heads of the whole process. A campaign for an advert starts from an advertiser, is managed and overseen by an intermediator such as Google Ads, and theoretically, ends on a publisher.

The Initiator

An advertiser is the one who kicks things off. Having a desire to promote its name, product, or brand value, the advertiser looks for an intermediator or an advertising agency to find a publisher who would be willing to place its ads on his website and starts an ad campaign placing different bids.

The Publisher

The whole advert campaign ends with the publisher finally placing the advertiser’s ads and earning according to the bids.

There are different bases on which a publisher gets money for publishing ads on his website which will be discussed later on, but it’s far-fetched to say that it’s a breeze for everyone owning a website or a YouTube channel to earn money like this.

The reason being, first, you should be eligible to make a Google Adsense account and place ads on your website or YouTube channel. Several factors determine whether or not you are eligible for the same.

Second, merely showing ads may not always generate a handsome amount of money. High and loyal traffic is crucial in determining your success in earning through ads.

Google's role

Google, as an intermediator, plays a crucial role in the whole process.

The advertiser, instead of having to go to every big and lionized website on the web, can simply make an account on Google ads and start a campaign by placing bids.

The publisher, on the other hand, makes an account on Google AdSense making him eligible to place ads on his website, blogs, or YouTube channel.

Different techniques of bidding

There are different ways of how a publisher would get the money for showing a certain ad and that depends upon which bidding technique has the advertiser used.

Let’s take a look at some of the most common techniques of bidding.

• CPM - Cost Per Mille or Cost Per Thousand is the amount an advertiser pays per thousand impressions on their ad. Simply as its name suggests, it has nothing to do with the clicks of the viewers. The advertiser simply pays per thousand impressions according to the bid.
• CPC – Cost Per Click is when the advertiser pays an amount on every single click the visitor has made. The advertiser bids the highest amount for CPC bidding referring to the highest amount he is willing to pay when someone clicks on a certain ad.
• CPA – Cost Per Action bidding is a technique in which an advertiser pays every time a certain action is performed by a visitor through an ad. For every action someone performs after clicking on an advert, such as signing up, or purchasing a product, etc.. the advertiser pays a certain amount based on the bid.

Note that only 68% of the total money received from the advertiser is transferred to the publisher, the rest of 32% is kept by Google itself.

Ads on Websites

While getting your Adsense account and placing ads on your website isn’t as hard as someone might think, still there are some terms and conditions for it.

According to Google,

• The website you want to place ads on should be running consistently with regular content being posted on it.
• Your website should be running for at least six months before you make an Adsense account.
• Your website's accuracy and efficiency will be checked by Google.
• Google will verify that your website is legitimately yours.

Some of these conditions vary according to the country you live in.

If these conditions are fulfilled, then under no more than a week or two, you will have your own Google Adsense account.

It is important to note that you cannot transfer your money from your AdSense account to your local bank account until you have earned 100 USD in your account.

Ads on YouTube

Unlike a website, not every channel on the YouTube platform, can have ads placed on its videos. Some conditions set by the YouTube Partner Program (YPP) need to be fulfilled before having your channel monetized.

According to YPP,

• Your channel should have a minimum of 1000 subscribers.
• Your channel should also have at least 4000 hours of watch time in the last 12 months, which should be raw. What that means is that the watch time hours will not be calculated if you, the creator of that channel, are watching your videos.

Secondly, it means that watch time will not be calculated for YouTube shorts, advertising campaigns, or for videos that you’ve set to private.

• YouTube will conduct a check on your channel, its consistency, quality, and accuracy.
• At last, you should have a Google Adsense account premade to link it with your YouTube channel.

If you fulfill all these conditions, you’re good to go. After all the checks and verifications, you will get a pin from Google AdSense to verify your address details.

Then after some minor formalities here and there, your YouTube channel will be monetized and you can start customizing which type of ads you want to show and their placement in the videos as well.

Ads Have a Large Presence On the Web

Ads are a good way to generate revenue if your website or YouTube channel has high and loyal traffic. They are mutually beneficial for both, the advertiser and the publisher as advertisements are one of the most effective strategies of promotion for the advertiser, and a great source of earning, for the publisher.