Contextual ads are ads that you get from a site that offers them, usually in a unit of four ads or more in different orientations.
Once you have put the code for these units on your website the company offering the ad unit reads your site and show ads that are relevant to your site.
Whenever someone clicks one of those ads you get paid for it.
The amount you get paid varies depending on how much the advertiser paid to have their ad shown.
There are lots of sites that offer contextual ads for your website.
Adbrite, Bidvertiser, Yahoo Publisher, RevenuePilot and FeedFusion are just a few of what's out there.
But the king of them all, the one that started the whole market is Google AdSense.
Even though most of the others have a lower payout amount and the conditions for having your website approved to show the ads aren't as strict, Google AdSense is still the most sought after of all the contextual ads sites by website owners.
The reasons for this is, one, Google AdSense was the first to offer this opportunity and so has been around longer.
As such Google AdSense is more familiar to people.
Another reason is they have a whole lot more advertisers they the other contextual ad sites and is able to offer relevant ads to a wider verity of websites where as the other sites may be limited in the verity relevant ads they can offer to some niche sites.
The number one reason Google AdSense is the most sought after contextual ad company by website owners is because they can pay more per ad click then the others can.
Advertisers are willing to pay more to have their ads on Google AdSense ad units and Google passes some of that money down to website owners.
The best way to make money online using Google AdSense is to build a niche website around a high paying keyword or keyphrase.
If you build a site around a keyword that pays you $1 or $2 dollars and you can average say ten clicks a day that's $10 or $20 a day that's $70 or $140 a week and $280 or $560 extra cash a month.
Now build 10 or 20 more of these sites around other high paying keywords and you can see how this can be a very lucrative way to make money online using Google AdSense.