AdWords is probably the most popular method of pay-per-click advertising. Microsoft adCenter and Yahoo Search Marketing are other top pay-per-click vendors.

The basic idea is that certain search words are relevant to your business, and when prospective customers enter these words into search engines, a link to your business will appear on the search results page.

The more you pay for a particular word or phrase, the better the chance you have of appearing on page one of someone’s search results. Also, whenever you do appear there, if someone (the searcher) clicks on your link, Google (or whomever you purchased the pay-per-click service from) will charge you for it (thus “pay-per-click).

You pay for each time someone clicks through to your page. If you notice on the Google search results page, several links appear at the top and side of the page, these are the pay-per-click businesses; they have paid Google to appear on page one.

The only drawback to this particular form of advertising is that you essentially have no control over the quality of the click-throughs (those prospects who click on the Google AdWords links in the Google search results). You could have a devious competitor who hires a computer programmer to design a program that would do searches automatically on Google each day and click-through to your site. You would then be charged for all of these click-throughs and they would all be worthless to your business. As a result, your competitor has used a devious tactic to disrupt your business. But when you think about this possibility, you will eventually realize that competitors can do this in other ways as well (programs that tie up your phone lines), so the vulnerability is not unique to AdWords.

There are bloggers or web masters who prefer to monetize their sites by selling banners, placing paid text links or Google ads in their content. What are the differences between these three methods of making an income?

Selling ads is not that easy and one has to wait that a request is made. If the site has a lot of traffic, this gets easier and ad spots are sold at a higher price. Advertisers will prefer a banner space in order to make their brand known and receive traffic in the process.

Placing paid links is a good source of income as advertisers are not very concerned about branding but more in improving their Google page rank and generating traffic. There are Networks that can automatically place ads on their member’s sites. The site usually has to have a Google PR of 3 to be accepted and host paid links.

Affiliate marketing has the following main advantages over the three methods above:

- Web masters decide which product and merchant to promote according to the commission they want to earn.
- Affiliate programs can be publicized just after the Affiliate Manager has approved the affiliate.
- Affiliate programs can be promoted in different ways: text links, banners, data-feed, content links and widgets.
- Income from affiliate programs can be of a much nicer level.

Affiliate Marketing is a nice way to monetize a blog or website that has already been around for some times. The best results are for the sites that promote affiliate programs related to their vertical. If the website is about Travel, does well in search engines and has targeted traffic, placing text or product deep links in the Travel category adds value to the site and generates income.

For recent sites, it is best to focus on content and SEO before including affiliate programs. After the site receives decent traffic, affiliate programs can be added progressively. The problem that most newbie affiliate marketers meet is that they are too impatient and expect to have results in a very short period of time.

Making money online with a website or blog takes time and knowledge of what to do to get results. Fortunately, affiliate marketing can auto-finance a website pretty quickly, and give the owner an additional income to pay bills, cable TV or a mortgage. Making a living with it takes evidently more time and work to acquire the experience just like any other occupation.

As a conclusion, while affiliate marketing is the best way to go in order to monetize a new website, older websites would benefit using intelligently all methods available.