How does the advertisement system works in websites?

[hiroto]

Do we have to go to the owner of the products and different businesses to advertise their product on our website OR do they come to us by themselves to advertise their product.. How do we earn then..

[J]

there are multiple types of advertisements that can generate revenue. they vary from things such as googles adsense advertising, to affiliate links with Amazon, best buy or click bank. then there is the display (graphics) that other similar niche businesses would put on a site

all of the above assumes some reasonable amount of traffic to the site

i've only touched a very very small segment of what is available- think inventively and it might just work

[?]

Selling ad space through an ad network like Google Adwords is probably most common, you just insert a bit of code, Google then inserts the ads dynamically, tailored to your page content or to the visitor.
There is more profit potential selling ad space directly, generally they would approach you through an "advertise here" page, ideally you would proiide some ad management software that provides view/click statistics.

There are ad brokers who sell and manage banner ad space on your site, you have better control of the ad choices than through an ad network, buyads.com, buysellads.com and blogads.com are the best known brokers.

You typically need many thousands of visitors a month to make advertising worthwhile, some more exclusive ad networks require a min of 500,000 visitors.

[marcus]

If you have good quality traffic in a profitable niche (like weight loss, internet marketing etc) I would suggest monetizing your site with a ClickBank product. All you have to do is sign up for a free account, browse through their marketplace, find a product you like and then promote your unique affiliate link on your site. In many cases the product owners will provide you with banners etc that you can use. Each sale can pay anything from a few bucks to hundreds of dollars, so it's worth it.