What Is Affiliate Marketing With Google Adsense?

Adsense operation which is a hundred percent google owned service is a program in which google place ads on your website or blog and pay you when visitors click the ads link on your site or blog. You see, publishers or advertisers create an advert and advertise with google. Now google (though a mighty network) do not have all the information a visitor needs, and that in simple plain English means that Google do not own all the internet traffic (people who visit websites in search of information.)

Google therefore wanting a bit of your traffic advertise on your site and in return pay you when customers clicks on or purchase your product. Google however decides what content or ads are placed on your site or blog, its design, how prices are fixed and the initial color. But, having an understanding of how google does this will put you in a comfortable position to manipulate Adsense in a way that generates increase revenue for you.

Google allows publishers to decide on how much they intend to pay for their advert and how much to pay per click of that advert.

Finally, you need to understand that Google decides on the type of ads to place on your site or blog depending on your page content and Google gives you ads that can earn you a few cents per click and sometimes some few dollars.
See further reading with harry J. Misner; The Best Damn Google Adsense Book Color Edition: How To Make Dollars Instead Of Cents With Adsense (Volume 1)
You can also see harold Davis Google Advertising Tools: Cashing in with AdSense and AdWords (Animal Guide).