For years, website owners have tried to make money from their sites by putting up banner ads in hopes of visitors clicking them. The problem with banner ads is that the Internet audience is so immune to them, people do not click on them anymore.
When's the last time you clicked a banner ad?
Second, in order for the web site owner to earn money from that banner ad, usually the web surfer that clicks has to purchase something. With AdSense, your visitors just have to click the ads. They don't have to purchase a single thing.
Third, most people that use banner ads do not do a good job of matching the ads to the website's content so the click thru percentages are dismal.
With Google's AdSense, not only are you displaying text ads, (which tend to receive a much higher click-thru rate than banner ads), but you are displaying contextual ads that match your website's content....thanks to Google's advanced technology.
Lots of times people think the ads are part of your site's content so they click because the information is relevant to your site. Whereas with banner ads, they often have little relevance and people tend to ignore them no matter how much they flash and fly across the page.