I want to discuss two ways to earn money on your website; Google Adsense and Affiliate Marketing. Google Adsense in the partner of Google Adwords which most people understand.
Briefly and somewhat simplified; Google Adwords are little advertisements we set up to promote our business through our website, When you search in Google you will have seen these ads at the top of the page and down the right hand side - they carry the title "Sponsored Results". For our own ads we choose keywords and short phrases that we want to be found for. Then we write an advert that Google will publish when someone uses our keywords and phrases. When someone clicks on our Advert we pay Google for the click. This is known as PPC or "Pay Per Click", to keep the spend under control we set a budget for the maximum amount per click we are prepared to pay and also a maximum amount per month in total.

What is Adsense?

So that explains Adwords; now it is less well known that Google allows website owners and Internet Marketers to advertise for Google and Google pays then a percentage of the revenue they earn from Adwords. In otherwords; If your website has Google Ads displayed on it and someone clicks on one of those ads; Google will pay you a finders fee for getting them the business. Adsense make you a "Publisher" of other peoples adverts.
I'll give you an example; TLD own's LearnToFly.co.nz, it gets quite good traffic and is on page one for a number of different keyword searches. We eventually want to make it a paid directory and earn money from it that way, however until it is finished I have put adsense onto it. Take a look www.learntofly.co.nz/ - Google is clever and it reads the content of the site and publishes other people ads that are relavent to Learn To Fly. When someone searches in Google and finds learntofly.co.nz and then click on one of the ads; we get paid anything fron 5 cents to $1 and sometimes more. Now don't get me wrong, this will not put the owners of TLD on the beach, but it does make a few dollars a month and this pays for the domain renewal and hosting. The income is growing, however the total traffic in New Zealand is unlikely to make anyone large profits from adsense alone. We look at it as a bonus and with many sites making a few bucks well.... Internationally on the other hand publishers can make a lot more, there are many website owners in the USA that make a significant living from adsense on their websites.

Affiliate Marketing Explained

Now lets look at Affiliate marketing; affiliate marketing is not unlike adsense in as much as a company pays you to get them business. This can be a affiliate marketing company that controlls many programs on behalf of the businesses providing the products or services. Or it can be an individual business you deal with directly without a middle man.