Monday, July 6, 2009

How Much to Charge for Advertising on my Website

When someone is interested in an advertisement on your site, then one of the first thing that will come across your mind is “how much should i charge”. If you charge too much, the advertisers will go away and if you charge too little, you will leave money on the table. There are actually no standard pricing structure across the internet.

According to some webmasters, they charge around $500 monthly for a 125 x 125 banner spot above the fold with 100,000 monthly pageviews, and some people charge lower. Most publishers tend to use pageviews (CPM) although other several metrics can be used to define traffic such as the unique visitors and visits. CPM stands for cost per mille (mille is the Latin word for 1,000).

There are several factors which influence the price like the format of the ad (e.g., 120x600, 125x125, 468x60) and the position (e.g., sidebar, header, blended with content, footer). 125 x 125 button ad on top of sidebar is arguably the most used format among blogs selling direct advertising space.

You can start from 0,5$ or $50 monthly for 100,000 pageviews if your blog is new and as the blog grows and more advertisers come along, you can anytime raise it gradually. Placing 300 x 250 banner on sidebar is similar to having 4 125x125 ads, therefore you can actually charge 4 times the price of 125x125 ad.

You also can increase the CPM if the ad is blended with the content or on the header and decrease the CPM if the ad is shown below the fold or on the footer.

In order to find out about the pageviews of your site, many webmasters prefer to use Google Analytics as it is usually the most reliable one. Other software and web stats programs tend to over estimate the traffic on your site.

Some advertiser also like to pay for a fixed price to display their ads for a period of time - this is called as flat rate. This is popular among smaller advertisers and publishers because it is very simple. Publishers present their website metrics (CTRs, audience reports, page views) to the advertisers and name their advertising rates. The pros and cons were then considered by the advertisers before making the purchase. Rates depend on the expected traffic, ad dimension/size, ad placement location and length of contract.

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