How is the money calculated from advertisements on a website? Is it based on views, clicks or a combination of things?

So me and my friends created a website http://www.doigiveashit.com/ because we were bored and are trying to earn a bit of money from advertisements but are not sure where we are earning our money from. 
Websites can make money in a variety of ways, but the two main ways are through advertisements and affiliate marketing [1]. Websites earn money when visitors engage with their ads, commonly by generating impressions, engagements, or clicks [3]. An advertiser, for example, might pay a publisher 20 cents per click [3]. If their ad generates 500 clicks each day, the publisher earns $10 a day or $300 a month [3]. 
Websites earn revenue when visitors engage with their ads, commonly by generating impressions, engagements, or clicks [1]. An advertiser, for example, might pay a publisher 20 cents per click [1]. If their ad generates 500 clicks each day, the publisher earns $10 a day or $300 a month [1]. A high CTR indicates that your ad is effective; people are engaging with it and clicking through to the advertiser's website or landing page [2]. Based on the value of that space to the advertiser, advertisers would pay publishers different amounts for impressions and clicks for ad inventory on their pages (space for ads) [3]. The value to the advertiser is solely determined by the audience that the publisher has attracted [3]. Content engagement affects the ad rates publishers are paid for display ads [3].