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Pay-Per-Click (Contextual) Banner Advertising
With the emergence of Google's AdWords and AdSense programs, the business of pay-per-click banners has exploded. This type of ad unit offers the tantalizing combination of ease-of-use and payouts for each and every click, regardless of whether that visitor converts to sale or not. It's no wonder this unit is so popular with the likes of Slashdot, which shows PPC marketplace links on the right-hand side of the site's main categories and posts, and Go.com, which uses Yahoo! Search Sponsored Results to power its search function. And these are just two among many, many other sites.
Business Model and Mechanics
As the name implies, pay-per-click banners are ad units that pay out each time they're clicked (with obvious fraud prevention engaged to prevent self-enrichment). These ads are sometimes called 'contextual' advertising, as the ad suppliers will often regulate where specific ads are placed, to ensure that they're relevant to the Web page on which they're viewed, and the audience that sees them.
The bounty paid out on each click is usually determined by the value of that click as set by the advertiser. This is a nice way of saying that you really don't know what you're going to earn from any given click until you check the back-end reporting.
Don't neglect checking out alternatives to Google's AdSense program. While Google is large and established, many smaller services actually share more of the advertising revenue with you. For example, bidvertiser.com is one alternative that pays out at a much lower threshold ($10) than Google. Also, if you specialize in Webmaster or Web hosting-related traffic, a new service at Webmaster911 offers much higher revenue sharing than Google currently offers.
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