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.