I've had several people ask me how to make money from their website lately. They have sites that get a lot of traffic but aren't sure where to start converting that traffic to cold hard cash.
Here are 4 quick tips on how to start:
1) The first is selling ads directly like you mentioned below. The "rule of thumb" is to sell ad space on a CPM basis. (Cost per thousand impressions). A site like Mashable.com charges $15 CPM. Some charge $5-$7 but it's rare. The best thing to do would be to find 5 comparable sites that have a comparable target market (similar advertisers) and request their "media kits." The media kit will include their site stats, demographic info (sometimes) and the CPM rates they charge. Your client will be able to use this to determine what the market may be willing to pay to advertise on her site and what is fair for her to charge based on how she compares to the competition.
2) Join a content network like influads.com. There are many startups right now that will help you sell ad space through their network if you have high quality content and traffic.
3) Join affiliate networks like Commission Junction (CJ.com), Pepperjam.com or ShareASale.com. These are less favorable but eliminate the need to "sell" the ad space. You can identify products that you think your readers will like and post links, ads or editorial content about the product. You don't get paid for impressions but you can get paid for clicks or get a % of every transaction.
4) Lastly, sign up for Google Adsense and let them serve ads on the site. This requires a LOT of traffic to make much money but you get paid per click instead of a % of sales and it requires no effort on your part.
All of the above or any combination thereof is a good place to start.