Based on my own experience, I would say the answer is: it depends. It depends on your niche, your target audience, and your traffic.
I have never really been a fan of putting all your eggs in one basket (learned that one the hard way), so I would suggest creating a more diversified revenue portfolio for your blog such as AdSense, affiliate programs, selling text links in house, alternative advertising networks, and/or partnerships.
What will really work for your blog will depend on your blog’s goals and target market. If it’s a highly personal blog which varies in topic, you may not be in a position to earn a fortune from it, however, you may be able to earn enough to pay for hosting. If you have a blog in a highly targeted niche area, you increase your chances of earning a decent consistent income.
With a site that only has 1000 visitors a day, you’re not going to make a fortune on AdSense… or on anything else. ~ Michael Moncur
Actually, this depends as well. I have a site that has considerably less than 1,000 unique visitors per day (heck, I’m lucky if it breaks 1,000 for the month) and it consistently earns me $250+ per month. It may not be a fortune, but the income is only slated to increase as it climbs in search engines and the traffic increases.
This particular blog is on a very small specific niche and is relatively new, but the audience is inclined to sign up/purchase the products I recommend. If they cannot find the product they’re looking for on my blog, they are likely to click out of my website on an AdSense ad.
I am not saying that earning money from your blog is as easy as taking a magic pill — it takes work, diligence, dedication, and a good dose of common sense, but I know it is very possible to earn money from blogs.
If your goal is to earn money from your blog, then it is just like any other business and it needs to be approached like any other business – with a level head and a plan.