If you've ever used the Google search engine, it's likely that you will have seen some advertisements calls “sponsored links.” From the name, you must recognise that people pay for those links.

Google have set up a nice easy way to relieve you of some money from your credit card, for which they display these adverts for you. You don't pay each time the ad is shown. You pay if the reader clicks on your ad, which will send the reader to the web site you have specified. You decide on the text of an ad you would like to place, when the ad should be displayed (for example, when somebody searches for "Christmas"), and how much you would be prepared to pay if the person searching clicks on your ad. The person doing the search is then sent to the web site you specified, and you get charged an amount that may be as little as one penny, but typically may be in the region of 3 to 10p (5 to 15 cents). The service is called Google AdWords.

There are many affiliate networks that allow you to send traffic to a third party web site that sells something, and pay you commission if a sale results from the action. ClickBank is one of the most popular; you may have purchased some products through them already! ClickBank mainly deals in information products such as ebooks and software. Another affiliate network is Commission Junction, one of the largest, which administers affiliate programmes for a lot of household brand names such as eBay. You can sign up as an affiliate for free, and they will send you money when your commission reaches a certain level; in some cases this is done electronically, in other cases through cheques.

How do you profit from this? Well, you place an ad in Google AdWords that leads to the web site. You think of phrases that people who are interested in buying the product may enter into the search engine, and then an advert that would be likely to get clicked on that leads to the web site. If the customer buys the product, you have paid maybe 5p for that person to click on the link, and have made about £10 commission from the sale!

Now, of course, not everybody who clicks on your link will buy the product. That’s why you have to monitor your advertising campaign, and there is an element of risk involved as nobody may buy your product. While you are starting out, you should expect your first campaigns to lose money; in fact, experts in the field only generate campaigns that make money about 1 out of every 7 times, and they believe that for new entrants into the business the numbers may be typically 1 in 20. As with any other business, perseverance is necessary to get to the stage where you are earning money. At the time of writing, I have so far had one successful campaign out of 12 that I have set up, so I don’t think that’s too bad for somebody who has never studied marketing before! I suggest that while you are starting out you keep the price you are willing to pay for a click low - a maximum of US$0.10 or £0.06, and you do not spend more than the commission you expect to receive on ads.

What’s good about this approach is that once you have come up with a campaign that consistently makes money, all you have to do is to monitor it, maybe once a week, or however often you feel comfortable with. You then have made a campaign that generates autopilot income for you! Keep on setting up successful campaigns and you will eventually make a significant income from this approach.

Google AdWords have something known as a display URL that is shown to the user; this matches the first part of the URL that the user sees when they click on your ad. They also have a destination URL. ClickBank and other affiliate programmes will provide you with a URL that is redirected to the web site containing the product. It is important to use the URL provided, because this enables the sale to be tracked back to you.

Google will only display one ad that is directed to a specific display URL. This means that if somebody is already promoting your product with your keyword, you will have to make it more attractive for Google to display your ad. Usually this means you have to increase the amount you are prepared to pay when someone clicks on your ad, although you can also increase the effectiveness of your ad (the ratio of clicks it receives to the number of times it is displayed) to do this. You can also design your own web page to pre-sell the product, and place your affiliate link on your web page.

A little information is dangerous! You know the idea, but you will lose a lot of money and/or time unless you do some more research. You can learn how to get started quite easily and quickly. There is an Acrobat E-Book that costs US$49.95 at the time of writing called GoogleCash that describes the basic concepts. It goes into depth on how to find affiliate programs that are likely to generate income, how to find keywords that are likely to be successful when promoting the products you have decided to promote, how to write an attractive ad that will get clicked on, and how to track your campaigns to make sure you are making money. Quite a few bonuses are included free with the package, but the best part is that it includes videos that take you through the process of signing into and using Google AdWords, ClickBank, Commission Junction, and various tools that are available to assist in affiliate marketing. It is reasonably up-to-date.

Do note that as the Internet changes frequently, there are a few things that are out of date. GoogleCash recommends many products that are designed to help you in your career as an affiliate marketer. It’s advisable to check that the products being recommended are the ones that other people have found to be useful. For example, I purchased Adword Analyser, and later found that I should have purchased Keyword Analyser. So before you buy anything else, I recommend that you sign up to a forum such as Adwords, because you can get up to date on the latest techniques in use and the latest products available to help. Online marketers do not share details of their campaigns very often, but they are happy to share information that will help other people become successful in the business. I found that Adword Mentor was a great introduction to the system, and then I moved on to the Web Profit School which required more background knowledge to start with, but provided more knowledge. Whereas these memberships are expensive, they are well worth it if you intend to make a living out of affiliate marketing.