Advertising on blogs is a relatively new thing, but there are two methods that a lot of bloggers generally find success in:
1. Ad Networks - Large companies pay an ad network to organize a campaign across many different blogs. The campaigns are often banner ads on your site. Each time the page is refreshed, a new ad placement shows up. Sometimes you'll see the same ads for a while, and other times it will cycle through several ads. The ad networks usually pay between $2 and $6 per CPM (which is cost per thousand page views). So if your monthly page views are 100,000 and you are running ads at $4 a CPM, you would make around $400 a month. There is little to no management in this type of advertising on blogs. It can be difficult to sign with an ad network, and the initial terms of your contract should get seriously scrutinized by a lawyer, so you don't end up signing your blog rights away and loosing all of your hard work!
2. Boutique Ads - This is often how bloggers get started with advertising: working with small shops. These ads are often small buttons on your site with a shop's logo on it. I started doing boutique ads with small etsy shops in exchange for their products. At that point in my blogging career, it was worth the free purse to put an ad up for a couple months. After a few months, I moved into only accepting money for advertising. Some Etsy shops were only interested in giving products, but many others saw the value in advertising and stayed on. It should be noted that having ads up attracts more advertisers. You'll start getting more requests when you have a few buttons up. Some people start by putting up buttons from their friends sites/shops just to get something up.
Check back next week for more discussion on Advertising for Bloggers by Liz Stanley! If you're new to this discussion, check out last week's post here about Getting Started. I also teach a Blogging 101 video class on July 25th.