This relevancy is the key to the programs success, and also the reason why everyone remains happy. The advertiser has a relevantly placed advert, the publisher earns money from their content and Google take their cut.
Of course, as always, Google has set some high standards for its AdSense program, in terms of looks and functionality. You can't have more than two such banners on your website and Google only inserts text in these banners.
So an extra benefit is that AdSense advertising is a lot less obtrusive then regular advertising. But this also means you should position the banner better because it's possible that visitors might miss it altogether.
So in the end, Google AdSense is an advertising program that is unique because the ads are relevant to the content on the site. Anyone that wants to advertise pays Google for it. Anyone who wants to place ads on their site does this through AdSense, getting paid by Google in the process.
All transactions are run through Google, and the advertisers and publishers get access to statistics which help them to understand and moderate the effectiveness of their campaign.
The whole process is elegant, simple and effective from anyone in the chain, from site visitors to advertisers, and it's one of the reasons Google are known for their innovation and new thinking.
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