Calculating Advertising Prices

Hi there,  I've been asked this question before:

Derek

What was YOUR offer? Just so we have a rough figure to make to them so it doesn't seem absurd.  

Well, often newbies like me are in dilemma about setting the correct price for their advertisements. Sometimes, we fear that quoting a high price can result in loss of advertising deal, while quoting less will be like giving our real estate in pennies. How to overcome this situation and how to correctly calculate the prices for our ad inventory? Here are some basic guidelines that I got from several source to calculate ad prices..

Image Vs Text Ads - Normally image ads are always priced high than text ads. The CTR (click-through ratio) of image ads is much higher than text ads and hence this pricing difference..

Size Does Matter - Larger the size of the banner, higher the price is.. If your 125x125 image banner is priced at RM30/month, a 250x250 banner should be priced at 4 x 30 = RM120/month..

Placement - If the advertisement appears above the fold (area visible without the need of scrolling), it is priced much higher than those ads that appear below the fold.. If an ad is going to appear in the footer, it's price will be considerably low than that placed in the header of your blog..

Pricing Model - There are two popular pricing models for advertisements at least from what I know.. The CPM (cost per thousand impressions) model and CPA (cost per action) model. The CPM model is the preferred way to calculate ad prices and is widely accepted model throughout blogosphere.. In this model, a fixed amount is paid for every 1000 page views, simple. But how would you calculate the right price for a particular ad in this model? Here are some ways to do it..

The best way to get the correct value of an ad is to check public ad inventories and see their CPM rate. Login to your Adsense account and go to advanced reports to view the CPM rate for a particular ad.. Take at least month long data to get the clear picture, though a long-range data will give much more accurate rate. Let's suppose you get a CPM rate of RM1.20 from the report. Now according to your assessment of the purchasing power of the advertiser you can increase or decrease this rate. A low budget advertiser can be offered a rate of RM80.00 or RM0.50, while a big web site can be asked for a CPM rate of RM1.50..

Let's assume that the deal is finalized with a rate of RM1.50 CPM.. How the monthly rate will be calculated? Suppose your blog generates 5000 page views per day. This amounts to 30 x 5000 = 150000 page views per month. So, at this rate the price of the ad will be (150000 / 1000) * 1.50 = RM225/month..


But if you still unsure about this, you might want to let the advertisers to quote their price first then, from there on you can start doing the negotiations until the deal is finalize.. 


Thanks for reading.. 

Read more »

Finding the Advertisers

 

    Hi there, well it has been a few weeks since the last time I've updated my blog.. Well, luckily the exam is over and I got more time to spend on blogging.. Lately, I've been spending a lot of my time doing some research about how to obtain direct advertisers.. So this time around I'm gonna share some info that probably might brought some interest to most of us..

  I gotta be honest with you, that this is the real tough part (at least for newbies) of finding advertisers for your blog.. Well, there are many ways to do it:
 
Visit Marketplaces - I'm not sure if you realize this, but there are several popular forums and discussion boards where advertisers and publishers meet solely for the purpose of finding and negotiating advertising deals. You can visit this site to find advertisers for your blog..

- Digital Point - Buy, Sell or Trade Forum
- SitePoint Marketplace
- Webmaster World Commercial Exchange Forum 

Check Competitor's blogs - Visit popular blogs related to your blog's niche and see who is advertising on these blogs. This is a good source of creating a list of potential advertisers. Since they are already advertising on a blog related to your blog's niche, a chance of clinching a deal from these advertisers is more likely to happen..

Check public ad inventories - Some 3rd party advertising networks give public access to their inventory to account holders. Sign-up for these ad networks and browse their ad inventory. Again, filter out advertisers related to your blog's niche. Here not only you can get a list of potential advertisers but can also get a fair idea about how much they are willing to pay..

Write a blog post about it - This is one more way to attract advertisers. Write a blog post explicitly stating that your blog is now open for direct advertising..

Search engines - And last but not the least is search engines. Type in relevant keywords and visit the web sites. Check their contact page and create a list of potential advertisers..

How To Approach Potential Advertisers

Okay now, once you have the list of potential advertisers in your hand, its time to contact them inviting to advertise on your blog..

Write a mail giving your brief introduction. State your purpose of writing in brief. To speed up the process give your phone number and messenger id. Attach the media kit/rate card showcasing various advertising options available on your blog. It's somewhat similar to mobile version of your 'Advertise' page. However, this document must contain detailed pricing of every ad type. You must also quote discounted prices for long-term deals. One more convincing methodology is to give limited period read-only access to Google Analytics dashboard to verify your traffic claims for long-term deals (6 months or more). This offer increases the confidence of advertiser and the probability of negotiating a deal also increases.

But always keep this in mind, if this is your first advertising deal, be ready to be flexible enough while negotiating pricing of your ads. Remember, your first deal will open the door for more such deals.

What Else I Have Missed?

I would like to know your experiences in maintaining independent ad inventories and your approach towards grabbing such advertising deals.. Until then, I will keep on digging around and gain some more info that can benefit us all.. Thanks for reading..

Read more »