Whilst for some people it is rather objectionable to make money from your blog, for the rest of us though monetization is one of the main motivations to maintain a blog. There are some people that make it sound easy to make money from blogs. However, it isn't. Traffic is always an important factor in making money, but another important consideration is that not all monetization techniques work for all blogs. For example, if your blog has regular readers then to cover it with ads, sponsored posts and blatant promotion risks losing those people who regularly visit. To monetize effectively you need to subtly introduce a little here and there rather than going overboard.
Here then is a quick run down of the top ways of making money from your blog.
Adsense - An obvious place to start perhaps. Adsense is easy to implement, just sign up and copy your paste code into your blog. You receive a few pennies every time someone clicks on an ad, so success depends upon traffic and where you place your ads. Make sure you do not overdo placing your ads in the best spots though otherwise you risk scaring off your readers.
In-text ads - With space at a premium in a blog, in text advertising is a great solution making use of the content on your blog and providing ads that are relevant to your content. There are a number of providers, but the one I use the most is Kontera as I tend to find that the relevance of the ads is better than others and therefore provides the highest number of clicks. I have also used Linkworth, which does not seem to deliver as many clicks, but the price per click seems to be higher.
Sponsored posts - One of the most popular ways of making money from blogs is sponsored posts. How this works is that you sign up with a sponsored post site and, provided you are approved, you will be matched with companies who would like you to write a post for them. Some of these jobs expect you to write directly about a product or company, but with most of them you can write pretty much anything provided that you include the required anchor text and link.
Some bloggers feel decidedly uneasy about this and they feel it compromises their integrity and their blog. I tend to see it as a bit of challenge to see how I can weave in the anchor text and links and still keep the post relevant to my blog. Nevertheless, it is better to limit the number of sponsored posts that you do otherwise you will find yourself losing regular readers fast. The general view seems to be that writing sponsored posts can detrimentally affect your ranking in search engines, but this has not been my experience.
I use a number of services, but the one I have had most success with is Blogsvertise - I get a reasonable number of tasks and they payout quickly and without fail.
Private advertising sales - This can be quite tricky to achieve, but can be quite lucrative. The best place to start is to make sure that any potential advertisers have some means of contacting you and to offer them a range of options - i.e. image ads, simple text link, etc. Selling links in the sidebar is the most popular and easiest to implement, but be aware that search engines tend to frown on this practice, so it is better not to mention on your site that you do this.
Affiliate links - This is simple in theory. You mention a product and slip in an affiliate link and hopefully people buy via your link and you receive a commission. However, it is not as simple as that. For someone to buy via your link you need plenty of traffic and visitors that trust what you say if they are likely to buy via your link. Another option is banners, although in reality you should not expect to make much from these.
Selling your own product - Another option is to use your blog as a platform to sell your own product, whether this should be an e-book, software, Wordpress templates or a physical product.