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Charge the right price for website ads

Date

Q. Can anyone advise how to price advertising on my website, in relation to 'impressions' (that is, number of times displayed on my site) and 'click-through' (that is, number of times clicked to get to their site)?

My site (www.mynorthernbeaches.net) is a community 'project' and I plan to charge businesses to advertise, then put a percentage of this revenue back into the community. I have customers keen to get this info for traffic purposes, which I can provide; however, I also need some guidance as to if/ how I should be charging for the service. Then I can work out whether I charge a flat fee, or to charge for number of impressions and clicks.

Of course, it's a bit like asking how long is a piece of string. How many unique visitors do you get and how long do they stay on your site will influence how attractive you are to prospective advertisers.

The simple answer is to model your pricing as closely as you can to that offered by Google and similar. Go to their website and play with the various keywords and see what Google charges (they charge per click). For example, "Business Coach" costs about $4 per click (I would know that, wouldn't I?).

Google AdWords is charged per click like this with little or no charge for impressions ( the more you offer to pay per click, the more impressions you get). 

I'd model your pricing on Google's and go testing it with your advertisers (or potential advertisers) - see how they react.

The beauty of this (for them anyway) is that there is no risk to them. A click from someone who has read their ad has a definite value and they only pay when someone clicks.

Answered by Jon Dale,
Business coach and owner of Small Fish Business Coaching

7 comments so far

  • First he is not google he is not going to get a few million visitors a day to his web site and people paying for advertising know this so they are not going to pay google rates for a ad. They could just pay google and put their ads in the ad sense queue.
    Second people advertising on smaller sites do it so they can pay much less for advertisements since the smaller sites do not have things like tracking of false clicks. A competitor could come in and click their ad a few hundred times to drive the cost up. Google does have this tracking.
    I suggest he goes for impressions charge a small monthly fee based on the traffic numbers he gets and the impressions the advertiser will get. Put several ads on the sites, small block ads on the side banner ads at the top and bottom that can be rotated in blocks of 3 of 4 advertisers. Don't try and charge google rates if you are not google.

    Commenter
    MDR
    Date and time
    July 11, 2012, 11:41PM
    • A click through is a click through, so why wouldn't it be worth the same whatever site it comes from? If he placed Google Adwords on their site (an option) they would receive the example $4 per click, so what's the difference if they charged that amount anyway? Nothing.

      Commenter
      Dave R
      Date and time
      July 14, 2012, 10:24AM
  • For me this approach would take too long, and you would still be bewildered. Set a fair if not generous price and see what happens. Don't be greedy but make an intelligent estimate as to what you think your web page is worth, adding in an altruistic premium for a charity based site.

    Commenter
    David
    Date and time
    July 12, 2012, 8:47AM
    • My advice would be to sign up with the Google Adsense program to show ads on your website. You will then start receiving revenue almost immediately. It is free and easy to sign up. And you will get a feel for how much you can earn from your current levels of traffic.

      Then I'd suggest speaking to your network who will value your audience better than Google do and try negotiate higher rates (advertisers tend to pay more for better quality niche audiences).

      Regards, Philip Shaw (CEO, CleverClicks)

      Commenter
      CleverClicks
      Location
      Sydney
      Date and time
      July 12, 2012, 9:52AM
      • The best way I've always found to price onsite inventory is using sponsorship. (I'm going through the exact same exercise right now on my website)

        You need to come up with a flat rate - it's easy and simple then to quote and understand.

        Calculate your Page Views and come up with an average monthly number. Multiply that by a CPM value (high value sites charge $40-50 CPM (which is very high)) This will give you a rough value for inventory

        i.e. 100,000 Page Views x $30 CPM = $3000

        Sell Ad spots on the site for $3000 for site sponsorship
        - You can then break it out into sections: $1000 for home page, $500 for events page... etc...

        This way, you're not beholden to delivering X amounts of impressions and potentially clogging up a spot for longer than you want... and also, the expectation of X clicks or X Visitors to their website disappears...

        Commenter
        DigitalAdvertising
        Date and time
        July 12, 2012, 1:43PM
        • The complexity of Google Adwords may be a bit hard to model. From a price point, per click, it can vary so much. Thats because Google rewards advertiser who know what they are doing. CTR, Quality score and the big relevancy come into play with Google and its algorithms on deiciding who pays what for clicks.

          There is a tool called Traffic Estimator that will allow you to see this range.that advevertisers pay for. Google also offers quite a range of tools for advertisers to use for measurement of performance of their ads. I doubt you will have this capacity to offer at the same level so my thoughts are costings on charging advertisers on your site should be much less than what google advertisers pay.

          Angel
          Business owner of Track n Trace Solutions

          Commenter
          Track n Trace
          Location
          Sydney
          Date and time
          July 13, 2012, 7:45AM
          • Unfortunately, these types of directory sites are short lived, Whilst they may seem like a great idea at the beginning, the reality is some what different. Businesses need revenue and they need sales fast and the best platform to deliver this is Google. They have the monopoly in Australia and its really the best pace to spend you marketing dollars.
            I wish this guy all the very best but its really very competitive out there and you have to go where people and businesses are looking.
            Steven ( Hopping Mad Designs )

            Commenter
            Hopping Mad designs
            Location
            Sydney
            Date and time
            July 13, 2012, 12:55PM

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