Contextual advertising means the advertising of products on a website according to the content the page is displaying.
For example if the content of a website was information on a Mercedes truck then the advertisements would be for Mercedes trucks for sale, or Mercedes servicing etc.
It picks up the words on the page and displays ads that are relevant to those words.
When someone either performs an action or clicks on your page, you as the website owner will get paid.
Who can use contextual advertising on their website?
Any one with content.
Meaning not links or pictures but word content.
There are several companies out there that offer contextual advertising programs.
Some of the big ones include Yahoo and Google.
The most important rule when using contextual advertising is DO NOT click on your own ads.
Google has terminated many publishers accounts due to this rule not
being followed and have gone to court several times regarding this
Contextual advertising can be profitable.
It can either pay for your hosting and maintenance costs for your website or it can pay for a lot more.
There are several people that are making a living from contextual advertising.
It all depends on the amount of traffic your website has and the manner in which you place the ads on your page.
If you place them in prominent places on your pages then you can expect to earn more.