The topic of hosting involves many different aspects; reliability, customer support, pricing, add-on features, programming, and allowable installation of PHP and other popular marketing scripts. Today, I'm going to focus on ONE topic, traffic, and the effects it has on your web site's hosting. The simple one word answer here is 'Bandwidth'. By definition, Bandwidth is the measurement of data, and the speed at which it flows through the phone lines, cable or DSL lines to transfer information to and from a web site via your computer.
In relation to your web site hosting, Bandwidth measures this flow of data transfer, otherwise termed 'Traffic'. In plain English, it's the number of hits you receive to your site; pure volume multiplied by the file sizes included on your pages. So, if you have an all text based web site, you would be able to receive more traffic, at lower bandwidth numbers, than you would if you have a 'graphics' intensive page, which would naturally have higher file sizes that are being transferred from your site to your visitor's browser.
How does this effect my hosting?
Well, that depends on your host, and the package you sign up for. For example, most hosting services set a limit on the amount of bandwidth they include with your fee per month. Depending on the nature of your site, (graphics intensive vs. lower file sized pages), you should be able to predict how much bandwidth you will need.
Case in point; my design site is definitely what most would consider a *graphics intensive* web site! I can tell you that most of my pages there are over the recommended file size of 24kbs. From my stats logs, I can see that I receive upwards of 150,000 hits to my site before I reach a total bandwidth of 2GBs, which is usually the maximum limit you'll find on lower scaled hosting packages.
If you know, or predict that you'll see more hits than that in any given month, you may want to consider shopping for a hosting package that offers a higher maximum of bandwidth allowed per month. Hosting companies that limit your bandwidth, charge an additional fee when you exceed your limits. The average additional cost I've found through my research is approximately $3USD per GB...
FYI= 1 GB = 1,000 MB 1 MB = 1,000 KB
So, if you have a bandwidth, limit of 2GB, that would equal approximately the same amount of data you can store on 3 CD's today. If you're building your first web site, and have no idea how much traffic you will generate out of the gate, I would recommend starting with a basic web hosting package. As your site grows in popularity, and your traffic increases, you can always talk to your host about upgrading to a package with higher bandwidth limits. From my own experience, brand new websites usually take about 3-6 months of solid promotion before bandwidth becomes an issue. Remember to use a host that provides in-depth statistics reports, and monitor your web site activity regularly. Watch for trends, and base your judgments on your results.