How Google Ads Works — Earnings & Calculation (2025 Guide)
Whether you’re a business owner, content creator, or curious learner, understanding Google Ads is key to online success. In this guide, we’ll cover how ads work, how earnings are calculated, how to get started, and practical tips for maximizing revenue.
1. How Google Ads Actually Works
Google Ads operates like a digital auction house. Advertisers bid for placement, and Google decides which ad to show based on two main factors:
- Bid — how much the advertiser is willing to pay for a click or impression.
- Quality Score — how relevant and high-quality the ad and landing page are.
The combination of these factors creates an Ad Rank, which determines visibility. This ensures users see useful ads, and advertisers get fair results.
2. How Earnings Work for Publishers & Creators
When advertisers pay Google, part of the revenue is shared with content creators (YouTubers, website owners, etc.). Here’s how you can earn:
- Cost-Per-Click (CPC) — you earn when a visitor clicks the ad.
- Cost-Per-Thousand Impressions (CPM) — payment for every 1,000 ad views.
- Engagement (YouTube) — revenue also comes from Premium subscriptions and watch time.
3. How to Start Using Google Ads (Step-By-Step)
If you’re a business owner or marketer, here’s how to run your first ad campaign:
- Sign up at ads.google.com
- Choose your campaign goal (sales, leads, website traffic, brand awareness, etc.).
- Set your budget and bidding strategy.
- Select your audience: location, demographics, keywords, or interests.
- Create your ad (text, display, video, or shopping).
- Launch and monitor performance in your Google Ads dashboard.
4. Google Ads Earnings Calculation Formula
The basic earnings formula looks like this:
Revenue share is usually:
- 68% for AdSense display ads (on websites)
- 55% for YouTube ads
5. Quick Google Ads Earnings Calculator
Total Estimated Earnings: $0
6. FAQs
Do all publishers get 68%?
No. Display ads pay 68%, YouTube ads usually 55%, and Google Search Partners often 51%.
What’s better — CPC or CPM?
It depends. CPC can be more profitable in high-value niches, while CPM works well for sites with lots of impressions.
Why do earnings change daily?
Factors like ad demand, seasonality, user country, and advertiser competition cause fluctuations.
Can I run Google Ads without a website?
Yes. You can run YouTube campaigns, app promotion ads, or even Smart Campaigns without a website.
