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Once you’re running a site and looking to generate revenue, you’re likely to consider selling advertising, which will throw up the tricky issue of working out what your rate is. Price too high and you’ll either get laughed out of town or create high expectations you may or may not be able to deliver on. Price too low and you may create the wrong message, or get advertisers but then struggle to create a higher value and up the rates.
How do I know this? I worked in advertising sales with both clients and ad agencies for over ten years before I worked for myself. I sold my first online advert in 1999 when the internet was still largely unknown territory for advertisers. I’ve troubleshooted struggling ad sections and have spoken with clients and ad agencies large and small. Oh and selling some advertising is part of why I am self employed as a blogger.
The first things you need to consider is whether you’re selling on traffic or quality of audience. Say what?
Not everything is driven by traffic. Some brands are more than happy to market themselves to a smaller audience of quality users as opposed to a large audience of questionable, fragmented users.
If you have a niche site, they may have the potential to influence or sell to more people than they would do if they were lost on a broader site.
If you are selling advertising based on traffic, you need to decide if you are selling:
at cost per thousand (cpm)
or tenancy
CPM means that if your site has 100K page impressions and you charge £10 per thousand and you sold one advert at that rate, you’d get £1000.
This is it in its barest terms but other factors will impact if you are rotating more than one ad in the slot. CPM works best when you either have a hell of a lot of traffic to play with.
Why? The numbers don’t stack up when you have lower page impressions to work with. i.e If you had 20K page impressions, you’d have to come up with a pretty high rate to make it worth your while. Or sell several ads on the page.
Remember though, if you’re selling on CPM, you need to deliver the traffic and if your traffic falls considerably, this will affect what you can sell at/how much money you make.
Tenancy is basically charging a rate for each ad to sit in the spot per month.
This is what most people I know that run small businesses do and it’s far easier than fannying around with CPM as if you were some sort of mega publisher. So for example, if you were selling a banner advert (these are horizontal rectangular ads that you normally see at the top of pages), you might say to someone, it will cost £100 per month for the ad.
If you are selling several ads on the page, so for instance a banner, a skyscraper (vertical rectangular ad), a few square buttons, then you have the potential to bring in a bit of cash each month.
If you have enough traffic to share around, you could have 2 or 3 people in one ad position that rotate. This means that you could charge, for example, 3 people, £100 each to share the banner ad position.
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