Here is a list of important terms, their common abbreviations and meanings:

Terms of Service (TOS). All participants in the Adsense program are required to abide by Google’s Terms of Service. This is basically the “rule book” for Adsense. Anyone who fails to conduct themselves according to the TOS may be banned from participation and/or have their account suspended. You should read the TOS carefully.

Publisher. That’s you. Anyone operating a site displaying Adsense ads is considered a publisher.

Pay per click (PPC). Google Adsense operates predominantly on a pay per click basis. That means the advertiser pays for each time someone clicks on their ad. It also means that you will get paid for every click.

Click through rate (CTR). This represents the percentage of page impressions that result in a click on an ad at your site. For instance, if your blog gets 100 impressions and 17 of them result in a click, the CTR for your site is 17%.

Ad unit. An ad unit is a displayed block of Google Adsense ads. There are a variety of ad units from which to choose. They are usually expressed in terms of their size in pixels. For instance, a 120 x 600 tower ad unit will be 120 units wide and 600 units long – tall and skinny.

Ad placement. This refers to the location of your ads on your site. You may place Adsense units anywhere on a page consistent with the TOS. There are a variety of online guides, charts and recommendations demonstrating the various location options and how successful they tend to be in producing a high CTR on the Adsense program site.

Channel. You can set up channels to track the performance of individual Adsense ad units or to track earnings on particular sites. You can establish your channels in the “Set Up” area of your Adsense account.

Competitive Ad Filter. Google gives you the option to block certain advertisements via the competitive ad filter. This allows you to avoid inadvertently advertising your competition.

The world of Adsense brings with it a new vocabulary that you must master in order to achieve maximum success. Terms like those above become second nature in a short period of time for most Adsense publishers. By knowing and understanding those terms, you can understand your performance charts better and also pick up all the latest Adsense strategies faster.

You agree to display contextual advertising served up from Google on your site. In exchange, Google will pay you for every visitor who clicks on the ads. Your blog becomes the online equivalent of a billboard and you are paid for getting cars to drive down your street to see it.

There are a few factors to optimizing Adsense profits.

One factor is getting traffic to your site. In order to get paid, you need to get clicks. In order to get clicks, you need to get visitors. Thus, many bloggers pay a great deal of attention to developing multiple traffic streams.

Another factor is choosing a profitable topic that attracts many advertisers. Some topics have more advertisers than others. So, it’s imperative that you choose a topic in  a market that offers many products and services.

These are essential aspects of the process but they are not the sum total of the Adsense game. There is another, often overlooked aspect to the process that is critical in experiencing real success: Ad placement.

Let’s say you have a blog that consistently gets 1,000 visitors a day. Let’s say that your topic serves up advertising that earns you, on average, ten cents a click. If every visitor were to click an ad, your blog would generate a whopping $100 a day.

Unfortunately, that doesn’t happen. Many visitors won’t click on an ad at all. In fact, most will not.

If you discuss Adsense with bloggers who weren’t able to make the program pay, you will hear a consistent complain: “I put up the ads but no one was clicking on them. I didn’t make much money at all.” These bloggers abandoned Adsense, believing it is impossible to make a profit.

Their failures could be related to any number of factors.

• Their traffic may have been poorly targeted.
• The ads may not have been relevant.
• Their blog content may have been of poor quality.
• The blog itself may have been unattractive and uninviting.

But it could also be a matter of ad placement. The location of the ads on the blog plays a major role in profit generation.

One blogger, who operates a fan blog about a popular television celebrity, was excited to find his blog had taken off. He was suddenly landing as many as 500 visitors almost every day.

Although the Adsense ads on his site were only paying about seven cents each, he felt good about the fact he was making an average of seventy cents per day on a site that required little maintenance or effort.

Ten people were clicking an ad every day, for a 2% click through rate. And that translated to nearly $250 per year – well in excess of the cost associated with running the site.

One day, the same blogger decided to give his blog a facelift. He tweaked the design and in the process, he moved his Adsense ad blocks to different locations. A few days later, he checked his numbers and was absolutely shocked.

His blog had gone from making seventy cents a day to making seven dollars a day. The click through rate had shot up to twenty percent almost overnight. The difference, testing later proved, was completely based upon changing the location of the ads. That $250 per year blog was now on track to generate over $2,500 per year.

The moral of the story is quite simple: Traffic is important but ad placement cannot be overlooked. The results in our example may not be typical but the story is true and it demonstrates the difference that can be realized when Adsense is optimally placed.

If you have a blog that produces a nice stream of traffic and are looking for alternatives to Adsense, you may want to consider some of the following options:

Adgenta (http://www.adgenta.com/)

Adgenta is a keyword-based advertising program that allows publishers to insert ads into their blog. Every time an ad is clicked, the blogger is paid a flat rate of 15 cents. While Adsense determines which ads to display based on its own assessment of your page’s content, Adgenta allows you to choose which keywords you would like it to use in choosing advertisements.

This can be a great solution for boggers who have pages that fail to serve up relevant Adsense ads or for those who tend to get only very low paying ads.

Adgenta’s interface is simple and sign up is free. The ads are inserted into your site using simple HTML blocks and the ads are actually linked graphics, unlike the more complicated script used by Adsense.

Yahoo Publisher Network (YSN) (http://publisher.yahoo.com/)

YPN is Yahoo’s version of Adsense and preliminary reports indicate that it may be a profitable solution for bloogers who are unable to use Adsense. The Yahoo system is very similar to Adsense. So, Adsense publishers should be able to utilize the program easily.

Although still in its infancy, the program is backed by a major player, which lends it a greater degree of long-term reliability. Unfortunately, the YPN project is still in beta and you must apply for or receive an invitation to participate.

Ad Networks

Instead of relying on a pay-per-click model, you may want to sell advertising space on your blogs. You can sell directly to advertisers or through the use of an ad brokerage.

If you have a blog that receives a significant number of well-targeted visitors, selling advertising space can be a great alternative to the Adsense model.

Other Options To Consider

• Chikita mini-malls (Chitika.com)
• Text link programs (Adbrite.com)
• MSN ContentAds (coming soon)

As you can see, even if Adsense doesn’t work for your blog or you cannot use Adsense, there are other options available. Adsense may be the biggest game in town but it certainly is not the only one.

AdSense will deliver relevant ads that are precisely targeted, on a page-by-page basis, to the content on your site. For example, if you have a page that about fishing, Google will send you ads pertaining to pet stores, fish food, fish bowls, aquariums, etc.

If you can also add a Google search box to your site and AdSense will deliver relevant ads targeted to the Google search results pages that your visitors’ search request generated.

And when your visitors click on the ads, Google pays you. It’s that simple.

What Google AdSense Offers

1. Ad performance reports. In the AdSense program, you’ll get a complete breakdown on how your ads are doing and how much money they’re bringing in.

2. Large advertiser base. Google has a huge advertiser base, so they have ads for all kinds of businesses and just about every type of content, no matter how broad or specialized it is. And since Google provides the ads, you don’t have to manage your advertisers.

AdSense represents advertisers that span the spectrum. These advertisers range from large global brands to small and local companies. And the ads are targeted by geography so global businesses can display local advertising easily. One more thing: you can use AdSense in many languages.

3. Appropriate ad filters. Obviously, there are some ads you wouldn’t want to have on your site, such as pornographic ones or sleazy multi-level marketing schemes that scream "Make $30,000 a month just for watching TV!" in big red letters.

Well, you can put your mind at ease. Google has an ad review process that checks the ads they send to your site. This process ensures that the ads that you serve up are family-friendly and that they comply with Google’s strict editorial guidelines.

Google’s ad-screening team combines sensitive language filters, input from site owners like you, and a team of linguists with good old common sense to filter out ads that could be inappropriate for your content.

And if that’s not enough, you have to capability to block competitive ads and choose your own default ads.

4. Ad setting control. Now, another thing you might be concerned about is whether the ads will clash with the look, feel and color schemes of your site. You needn’t worry.

You can customize the appearance of ads and choose from a wide range of colors and templates. Same thing goes for your search results page. And reports are customizable, too. Google provides flexible reporting tools that allow you to group your pages any which way you want.

That means you can view your results by URL, domain, ad type, category and more so that you can figure out where your earnings are coming from.

How Much Money Can You Make From AdSense

While no one can guarantee results since a lot of your success lies in your own hands, Google AdSense has the potential to make you a millionaire. Many web publishers are making a lot of money from AdSense and there’s no reason why you shouldn’t be one of them.

The amount of money you can make with Google AdSense mainly depends on three factors:

1. Cost Per Click (CPC): The amount you get paid every time a user clicks on an ad. CPC rates for competitive keywords can be more than $1, which translates directly to your site’s earning potential within the program.

2. Clickthroughs: The number of visitors who click on the ads. The higher the clickthroughs, the higher your AdSense revenue will be.

3. Traffic: The number of visitors on your site. The more visitors you get, the higher your AdSense revenue will be.

How To Get Started With Google AdSense

It’s easy to get started with AdSense. You fill out an online application and once you’re approved, it takes only minutes to set up AdSense.

All you have to do is copy and paste a designated block of HTML into the source code for your site. Once you do that, targeted ads will start showing up on your website.

To fill out the online application, go to:

https://www.google.com/adsense

Google has no strict criteria for acceptance into the AdSense program and AdSense doesn’t hit you with a minimum traffic requirement. The only criteria they’re really sticky about is the standard "acceptable content."

Once you’re accepted into Google AdSense, you’ll be able to place AdSense advertisements on any site you own, provided that you obey the Google guidelines.

Before you sign up, make sure you read the lengthy and detailed FAQ on the AdSense site.