Coming up with a price structure for advertising on your website is more of an art than a science. If you price your ad spots too high, nobody will want to advertise (or they won’t renew), and if you price it too low, you could leave a lot of money on the table. So the question becomes, “how much do I charge for advertising on my website?”

Here are the things I think you need to consider when coming up with your website’s pricing:

Prices other sites are charging

• Media buyers and advertisers want to determine how much a customer acquisition will cost them on your site vs. other websites. If your site gets 1,000 visits a month and charges $200/banner and another site gets 10,000 visits a month and charges $350 for the same banner and placement, you can probably guess where they will spend their money. Perhaps they will run a test with you if you’re lucky, but your pricing should be realistic.

Audience interaction with your website

• The more comments people post, the more engaged your readers tend to be with your website. If they are interacting with your site, you have a captive audience. Other examples of interaction are Twitter re-tweets and will soon be Facebook Likes once that rolls out further. If people recommend your site to others, advertisers will probably want to be there.

Traffic to your website and rankings (Compete/Alexa/Quantcast).

• Everyone uses different analytics sources it seems, but the metrics companies generally don’t lie. If you say your website gets 2,000 unique visits a day and you’re Alexa ranking is 85,000 and Compete is at 100,000, you are probably looking at funky traffic #s or perhaps your stat counter is counting bots. Advertisers don’t want to server advertisements (and pay for them) to bots. Bots don’t buy products 🙂

Comparable cost for a PPC campaign

• If advertisers are paying $2.00 a click on Adsense or other PPC campaign, and they can get more clicks (that are targeted) from your site with the same sales rate, they will probably want to advertise. Determine the going rate for an Adsense campaign on a site like yours and test how many clicks each banner spot typically gets (using internal banners or affiliate banners that track clicks) and price accordingly.

How targeted your site is

• You can charge a lot more for your website if you get considerable targeted traffic. If lots of people are coming to your site to learn something specific or to read about something specific, they all become potential targets for advertisers. If you have a very broad website, many advertisements won’t be relevant to the visitors, so advertisers will expect to pay less

Your time commitment

• From an advertiser’s perspective, this isn’t really important, but from a publisher’s perspective, it’s critical. Unless you are independently wealthy, you need to consider the amount of time you put into your website and be paid accordingly. As my business has grown, I couldn’t afford to spend the time and effort writing articles if I wasn’t making enough revenue. I love blogging and sharing, but it just wouldn’t make sense for this to be a detriment to my business growth. Time investment and revenue potential are two things that need to balance for your site to be a financial success.

Hope you’re having a nice Sunday. I am off for a long bike ride today… just a couple weeks until my 5 Boro Bike Tour, and my wife and I are just a few hundred dollars away from our goal for the Ronald McDonald House.

Lowell.com was finally relaunched a few days ago, and a number of bugs have been fixed and/or are being fixed. One thing I did to find errors was put out a request on Twitter and Facebook. I got quite a lot of feedback from people who are interested in the site (including the information that my current logo was liked and another logo wasn’t favored). In addition, a number of people have signed up to post articles.

Here is some information about the new Lowell.com website so you can be inspired or be helped with your own development projects:

• People can sign up and post articles, events, and/or comments. This will add content to the site and hopefully increase traffic and pageviews. It’s also helpful to people in the community who are now more easily able to promote their news and events to an audience of over 10,000 visitors per month.

• My developer used a plugin called “The Events Calendar” which is fantastic! The only issue I am having now is that events seem to fall off the home page before they start. I’ve checked the server clock and WordPress clock on site, and all are working fine. This is something I need to fix.

• I also need to fix the Yet Another Related Post Plugin, as it’s not showing up on Pages.

• Advertisers will be able to sign up for business listings in the same way dog walkers can on DogWalker.com. Listings will automatically renew in a year, and their Paypal account will auto-pay in a year. This is so I don’t need a representative in the area.

• Banners, hotel listings, and restaurant listings will all be manually managed by me. The Lowell Courtyard by Marriott. has agreed to continue with a monthly banner, and the Radisson Hotel signed up last week, so things are off to a pretty good start (no, I didn’t offer them a discount rate or freebie to get them on site).

• I am using Adsense in the top banner spot and one of the side banners, although these can easily be replaced by local advertisers if/when they are interested. The Adsense banners are earning somewhere around $5/day right now despite the fact that traffic has gone done in the last few weeks.

• This is obvious, but make sure you test your newly developed websites with all commonly used Internet browsers. Make sure you test all parts of the site, especially if you use different plugins.

• One of the nicest thing about this site is that I can now basically replicate the platform on Newburyport.com for relatively little expense since I paid for the foundation with Lowell.com’s development. Since Newburyport is about 45 minutes from Lowell and is a tourist locale in the summer, I think these two sites will work well together. The only issue is the time commitment required to run another site like this… I might finally have to relent and hire someone full time to work with me.

• I ran into some major issues with hosting, the htaccess file, and assorted other related bugs. Ultimately, things worked out after quite a bit of time troubleshooting with Liquid Web and my developer, but it was still a challenge none the less. I think this is probably the biggest hurdle I faced since I am not really knowledgeable about these technical issues.

• As with most of my other development projects, I used Six One Five Design for the development work. Mike is still working on a few things, but I think it’s nearly finished.