How much to charge for advertising on your website or blog

Someone wants to buy advertising space on your site. Here's how to decide what to charge.

By Donald Ritchie

If you have a successful website or blog, you'll sooner or later be approached by companies wanting to pay you to display their advertisements. Many of these will be cold calls from mass-market networks trying to sign you up for their service. But some will be genuine enquiries from businesses that have picked your site as suitable for selling their products or services.

If that happens to you, an obvious question will arise: How much should you charge for showing the ads?

I can't give you a firm answer to that question - or even a ballpark estimate. There's no such thing as a standard tariff for advertising across the web. The actual rate will depend on several factors, not least of which is the market sectors and countries that you operate in.

However, if you are already using an advertising network (for example, Google AdSense), there is an easy way for you to determine the appropriate rates.

Start with the RPM

Essentially, you start by looking at your existing "rate per thousand" (or RPM). This is the figure in your advertising network's reports that shows your total income for each thousand impressions of your site. In this context, an "impression" is the same as a page view. Each time a visitor goes to a distinct page on your site, that counts as one impression.

So, if your income for a given month is $50, and you received 5,000 page views in that month, the RPM will be $10. Keep in mind that that's an average for the site as a whole.

The next step is to extrapolate that figure for the page on which your prospective advertiser wants to place their ad. If the page in question receives 1,500 views per month, then the target income for the page would be $15 per month (1.5 x $10).

Next, divide that figure by the number of existing ads on the page. If you display three ads from your existing network, the target figure would now be $5 per month ($15 divided by 3).

Extra work

Finally, take the resulting figure and double it. Why double? To reflect the extra work you will have in selling the ad, invoicing it, keeping track of renewals, and other tasks that don't apply when working with AdSense or similar networks.

So, what you have now is a dollar amount per advertisement per page per month. To avoid having to mess around with small amounts and short periods, you might want to stipulate a minimum advertising period of six months or a year. Or, accept a shorter period but give a discount for a longer one.

Of course, there's no guarantee that the final figure will be one that the advertiser is willing to pay. But at least it will give you a starting point - a basis for negotiation. Provided you approach the matter in a business-like way, you should end up clinching the deal - and making some useful extra income along the way.

March 2012

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