Excerpt from: Don't Waste Time on Google AdSense
With Google AdSense, Google ads are targeted to your website using three methods: contextual targeting, placement targeting, and interest-based advertising. Contextual targeting matches Google ads to the prominent keywords on your website. Placement targeting allows advertisers to choose specific sections of your website on which to place their ads. And interest-based advertising ensure that the Google ads shown on your website match the interests of each user, based upon the other websites they’ve already visited.
In order for you to maximize revenue with AdSense, Google tries to ensure that the ads placed on your website match your website content, satisfy the needs of advertisers, and appeal to your users’ interests. Google accomplishes all this through three targeting methods.
Contextual targeting matches Google ads to the keywords on your website. Google examines each webpage for the repetition, placement and formatting of keywords to determine which keywords best characterize your content. Google then examines the keywords in its ad inventory for the most suitable ads for your webpage.
Placement targeting allows advertisers to choose specific placements as defined by website publishers. Publishers can define their own ad placements using custom channels that group together specific ad units on a website. You can group ad units by topic, ad format, or location on a page. Thus, when advertisers target ad placements, their ads may only appear in the specific ad units the publisher has selected.
Interest-based advertising targets the Google ads on your webpage to a user’s area of interest, which is determined by other websites they have visited. To achieve this, Google examines the cookies on a user’s computer that detail which websites they have visited. Based upon those websites visited, Google interprets the user’s area of interest and runs related Google ads on your website.
Avoid common pitfalls and make money with Google AdSense by reading Don’t Waste Time on Google AdSense.