Google Adsense is a CPC (cost-per-click) advertising program that allows publishers (anyone wanting to put ads on their websites) to insert a small amount of HTML into their sites and have ads appear that are targetted and relevant to the content of the site.
The good news is that Adsense is about the easiest way for bloggers or webmasters to start making money with their sites. After installing the ad code in your site, the Adsense spiders will crawl your site to see what all your pages are about. They then check their inventory of ads and put related ads next to each of your articles. This works out well for everyone as someone reading an article on gardening is much more likely to buy gardening tools than someone who is reading an article about car tires.
So, how does Adsense work? It starts with the advertisers who choose which keywords they would like to advertise on. Let’s suppose I want to advertise my new line of gardening tools that I just created. I would bid on certain keywords like “gardening, gardening tools, tillers, pulling weeds, etc”
The Adsense spiders would then match my ads up with :
Those specific keywords that people type into Google and display them to the top and right of the search results
Websites (like yours) that display adsense ads.
The adsense folks will send out Robots to crawl your site to see what all your content is about. If they find that you have content that has some of the same keywords that I (as the advertiser bid for) then my ads will show up on your site next to your article about gardening tools.