By now most people have seen Google's new AdSense ads appearing on some of their favorite websites. Extending the same algorithms that make such a robust search-engine, Google is able to provide webmasters with advertisements related to the content of any given web page. Simply add a few lines of code, and up to 4 classified ads (nearly identical to Google's AdWords included in Google search results) will appear on the page. Webmasters receive part of the revenue Google collects when a visitors clicks on one of these ads.

I willingly admit AdSense has a few advantages with which today's affiliate programs simply can't compete. Featuring a "set it and forget it" mentality, AdSense allows you to spend a few minutes setting up your page and know that fresh content will appear each time your visitors return, without any additional work on your part. The closest I've seen an affiliate program come to this is Amazon allowing you to display the top sellers in a given category at any time. It isn't as versatile as AdSense, though, and it does take more time and effort to setup.

The other striking advantage AdSense has over affiliate programs is the range of content pages for which it is appropriate. If you have a page about web site hosting, there is no shortage of web site hosting affiliate programs that will help you generate revenue and provide additional information for your visitors. Create a page about the American Civil War, though, and you will have a hard time finding an affiliate program that relates to your content. Civil War webmasters should sign up for AdSense and Google will provide several paying links that will likely be of interest to visitors.

Lest you think the title of this article was an accident, let me explain where AdSense falls short. The reporting and tracking available is bare bones. All you get is the number of impressions, clicks, and total earned for each day. The lack of information about which page on your site generated the click and what the text of the ad was makes it difficult to know how to improve your conversion rate.

Somewhat inexplicably, part of the AdSense user agreement requires that you not disclose your AdSense statistics to other webmasters. The only explanation I can imagine is Google wants to prevent anyone from cracking the algorithms they use in calculating payments. Which leads to my next point…

Google is not disclosing how your earnings are calculated. At least in these early stages of the program, the revenue is high enough that no one is complaining. Some reports that I've read indicate earnings per click of $.25 up to a dollar and higher for some keywords. My personal experience with AdSense lends credence to these claims, but Google is in no way obligated to maintain these amounts.

Of course, the ads that Google provides aren't always relevant. If your page discusses "cellular mitosis" in great detail, including AdSense on your page is going to present your visitors with cellular phone advertisements. A determined advertiser with deep pockets can also force an ad onto your page even if it doesn't relate to your content. As I'm writing this article, the top advertisement that appears on the signup page for my AffiliateScreen.com monthly newsletter is about mortgage interest rates.

Most useful web pages have a decent amount of text on them, and AdSense relies heavily on that fact to find the ads that will most appeal to your visitors. Some frequently visited pages don't follow this rule, though. The affiliate income calculator at AffiliateScreen.com is one of the most frequently visited parts of our site, but it contains almost no text. Unable to determine appropriate ads on a page such as this, Google will display ads for non-for-profit organizations such as Habitat for Humanity. It is a nice gesture, but even if it appeals to your visitors, you aren't paid for this type of untargeted traffic.

As someone who uses Google in the role of an advertiser, I prefer to have my ads displayed in search results, instead of included on a page with a great deal of content as is usually the case with AdSense pages. When a web surfer is looking at search results, they are hunting for information and haven't found it yet. These people are more likely to click my ad. On a page of mostly text, there is a greater chance they've already found what they were looking for. Google even acknowledges this fact to advertisers by pointing out that only the conversion rate of their ad in search results is used to calculate ad positioning. The much lower conversion rate of ads placed on content-rich pages is ignored.

I have elected to have my ads only appear in search results because I don't want to keep throwing my marketing message at people when they aren't interested. If advertisers as a group lose interest in creating advertisements for AdSense pages, the payout to webmasters will quickly drop.

I do think AdSense has a place on a content rich web site, and I make use of AdSense on multiple pages at AffiliateScreen.com. I do not think this service will replace affiliate programs, though. Since you know what is going to be advertised on your page with an affiliate program, you can create content that supports the product and will improve conversion rates. The control of affiliate programs also allows you to limit the endorsements on your site to only the best products and services.

Like affiliate programs, AdSense is a tool available to webmasters to generate revenue, as well as provide valuable resources to their visitors. Expect to see both on the web sites you visit for years to come.