Google Adsense is most reputed and highly trusted contextual advertising program offered by Google.
Following steps will make it clear how google adsense works:
1.Make a website/blog.(Will be discussed later)
2.Get an account with google adsense by registering your website/blog.
3.Google Adsense account enables you to use different ad formats for your website/blog.
4.People who visit your website/blog are looking for some particular information.They are more likely to click on the advertisements as they are related to your site content.
5.For every valid click made by the visitor,google will pay you a certain portion of money.
This is the general principle on which Google Adsense works.