If you are a blogger you probably already know about online advertising. In fact, there is a certain breed of adloggers ( bloggers who blog for money ) whose sole motive to setup a blog is to sell ad space on their blogs and make money from it.

Google thrives on online advertising. And there are many companies who do the same kind business in their own way. Let's take a look at the popular business models adopted by these companies.

Google the Big G as it is called in blogging circles, is the company which gives almost everything it develops for free and earns through advertising. Adsense is the most popular advertising platform used by advertisers and publishers alike.

Google has devised a very amazing way to sell advertising space. Google displays ads on relevant websites and charges advertisers for every valid click. Adsense has become prevalent due to the free blogging platform offered by Google. So here is how things get rolling. Somebody visits a website, Google displays relevant ads on the fly, the visitor clicks the ad if he finds it interesting and jumps to the advertiser's website , Google charges advertisers and gives a share to publisher to whom the site or blog belongs. This is CPC (Cost Per Click) model. This is the most popular model due to its simplicity and low cost.

Google uses another model too. That model is called CPM ( Cost Per Impression). In this model advertiser pays according to the frequency of ad displayed on a publisher's website. This ads are graphic or flash based. This model is a bit less popular among small publishers as the earning depends on the number of page impressions which may not be very good for small publishers.

This business model is used by many companies like Adbrite, Adengage, CPXInteractive, SMX Ads, Speedy Ads, Tribalfusion, Chitika, Tyroo to name a few. Even software giant Microsoft uses this model in form of Microsoft adCenter. The search engine giant Yahoo too have adopted this model in form of Yahoo Publisher Network. Some of these companies are not accessible for a small publishers due to their high traffic requirements. This business model has a downside too. You must have surely heard of click frauds. Although Google and other companies are fighting the click-frauds, these are not completely detectable.

Then there is another business model wherein companies act as mediator between the above companies and publishers. These make their ads accessible to small publishers too thus increasing their reach. For their services these advertising companies charge fraction of either publishers' income or a fraction of advertisers' income or both. Scribefire is such a company which offers advertising network with the name of QuickAds. They claim that they have devised an algorithm which decides which ads are best paid and displays them accordingly.

Youtube has recently announced that it will sell search terms to advertisers. When someone searches for a video the advertisers video will show up in the sponsored space. I think this is gonna be a very successful model and will finally make Youtube a profitable venture. Google is doing it for years.

There is another type of business model used by companies who are more action oriented. In this type of model a publisher acts as an affiliate for a company like Amazon, Ebay or Commission Junction and is paid either when a visitor purchases something. Some of them also pay for lead generation. This model has much less number of publishers as selling something is very hard thing. You have to convince someone who does not know you to shell out dollars.But then the return too is good.

So this is the brave new world on online advetsiting companies and their giant networks. This just the tip of the iceberg. The list goes on and on as the world wide web evolves, so does the business model of the companies online.