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How do I Charge for the Advertising Space on my Web Site

Aug 21, 2008
If you're selling advertising on the Internet, you need to decide how to charge for it so that you can make your business as profitable as possible for the industry you are in. So, should you set a flat fee per month based on the advertising inventory you provide, or should you use CPM? This is something that only you can decide on.

If you do decide to charge on a cost per thousand (CPM) basis, this will mean charging your clients a figure whenever their ad has been displayed 1000 times. This is still a very popular model especially on Business to consumer websites and a lot of agencies will already be working with this pricing structure.

With this format, a website that has a CPM rate of $30 and guarantees advertisers 100,000 impressions, will charge $3000 ($30 x 100). The "M" is the Roman numeral denoting 1000.

You can use CPM charging to entice and sell to clients who don't necessarily have deep pockets, like those who are putting together or building up affiliate marketing enterprises for themselves. These people are not planning on throwing out a lot of money on advertising; they prefer to pay as they go, as they see it as more cost-effective solution and it will be easier for them to track results. CPM is also a very good strategy for you to use as a selling model if you can prove through stats tracking that you get a certain minimum number of page impressions per month and that number is a high one - you can then use the fact of your high traffic to offer very competitive rates on advertising and make good profits on volumetric sales.

On the other hand, clients with deeper pockets for advertising budgets, such as brand name marketers who sell offline as well as online, move a lot of product, and have fierce competition. They will be much more open to paying monthly fees and this is especially true because they will not opt as much for click-through marketing strategies such as those pioneered by Google AdWords. Instead, they will want to grab people's attention with banner style ads and to a certain extent they see advertising as a useful way of building awareness and creating visibility for their brand. These marketers are used to having some advertising that works and some that doesn't, but they are willing to pay for the campaigns that do work for them.

This set price format is very popular in a business to business environment and prices generally range from $50 to $1000 per month. Of course, this does depend on the popularity of a section and/or page impression rates - whether the ads rotate and join other ads in the same location is another factor in determining price.

Many times marketers will also go through Internet Network Advertisers to find websites to advertise on; and many of these companies will want you to show a minimum number of unique visitors per month on your website to qualify. If you do go down the network route, make sure that you are paid the highest possible cut or commissions on your ads. You would be wise to try several providers first and this should only mean that you would have to paste in some code on your web pages for the ads to display and to be tracked.
About the Author
This article May be used on other sites but this resource box and all live links MUST be left intact Andrew Long runs a subscription service for webmasters and website owners called ARC, which includes topics about Advertising For Your Website and Adverts On My Website & Webmaster Revenue
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