What are they?
AdSenseThis is a product from Google that lets you publish other people's advertisements on your blog:
- You create the posts (or pages) that ads go on or with, choose where ads should go on your blog, and say what colour scheme to use.
- Google deals with the advertiser for you, chooses what ads to put in you blog, and pays you if your ads are "successful" (more about that below).
AdWordsThis is a product from Google which lets you advertise your blog (or other website) in search results and/or on other people's websites or blogs.
- You set up the Ad, and say how much you're willing to pay each day and per click.
- Google negotiates ad placements for you (you're competing with other people who want to advertise in AdSense, and also with advertisers in their other advertising networks), and charges you if readers interact with your ad.
Costs and BenefitsAdSense is free for publishers (you are a publisher if you put AdSense ads on your blog) - and you get paid if your readers view or act on certain that are shown on your blog.
AdWords is not free for advertisers, but many people think that it is cost-effective. There is a sign-up fee (varies from country to country - for me in Europe recently, it was E10), and you also pay each time that a reader clicks one of your advertisements, or (in some cases) each time your advertisement is displayed. You have a high level of control over how much you bid to have your advertisement shown (minimum of 1c per click) and can set a maximum budget per day (eg $1.00).
AdWords is the tool that may generate traffic for you.
AdSense is the tool that may generate revenue for you.
Related Articles:Advertising and Blogger: Things to Consider.
Setting up AdSense on your Blog
Putting AdSense ads inside Blogger Posts.