How much to charge for advertising on a web page?

[Mike Lewis]

A client of mine has asked my advice about selling advertising space on their site. In the past, when people have asked about this, I suggest they sign up for Google AdSense, as this is the simplest way I know of generating advert revenue.

In this case, the client says they want a more hands-on approach. They feel they can go out and sell the advertising space themselves, to their existing contacts in their industry. In fact, they've already had one unsolicited enquiry from a would-be advertiser.

What they don't know is how much they should charge for the advertising. They would like advice on what model to use for charging, and how to determine the actual rate.

They know their hit rates, visitor rates, etc for each of their pages (at least, they know these figures within the accuracy of the web logs),but they don't know how to convert those to pounds and pence.

Any advice from you experts would be appreciated.

Mike

 

[Employment Law Services]

Hi Mike

I've had quite a lot of experience of website advertising - buying and selling - albeit not for my HR business. In my experience Google Adsense pays virtually nothing unless your site is specifically designed for it and is getting loads of traffic >10k visits per day.

If your client is getting that kind of traffic (>10K visits/day) the simplest way for them to monitise their site would be to use an advertising agent. They would still have full visibility of click thrus, etc and a certain degree of control over content but wouldn't have to get bogged down with the hassle of verifying ad sizes, establishing a rate card, tracking ad performance and providing reports to their advertising clients.

If they want to go it alone, the price they charge really depends on the amount of traffic they get on the pages they want to place ads and the positioning of these ads on those pages e.g. banner at top, skyscraper at side, above of below fold, etc, etc.

Price is also depends on the type of model they choose. In my experience there are essentially 3 models they could adopt -

a) static display ad charged out for a fixed fee, usually with a minimum term (3 mths)
b) rotating display ad where they charge for impressions - cpm - or charge slightly less than a static ad
c) static or rotating display ad where they charge per click through - ppc

With option A they could vary the charge based on the size and location of the ad and the length of time they sign them up for whereas with options B and C they could simply set an impression or click rate but could include a sliding scale for the ppc ads which would see the cost increase based on positioning.

For options B & C, they could use Google Adsense as a benchmark in terms of setting cpm and ppc rates - probably start at £0.50 and scale up to £2.00 per impression or per click thru

For option A, the price they set really depends on their traffic volume (visits, % new visits) In the past I've paid approx £300 for 3 months display of a combination of a skyscraper and banner rotating ads on the homepage of a member based website that was getting between 2.5k -5k visits per month about 35% of which were new. However, I was recently quoted £500 for a static display ad (banner) on a forum page for one month - I flatly said NO.

The best thing they can do is find 4-5 other sites that get similar traffic (volume & demographic) and ask them for their advertising rate card then

 

[Mark]

Not sure how useful this might be but will mention it anyway.

https://adwords.google.com/select/TrafficEstimatorSandbox

What you could do, is enter some keywords based around the niche of the website. Set the currency to GBP (without entering any values) and select the UK as the target market.

The tool will then come with with an estimate of how much those keywords would cost per click on google adwords if you were to advertise on google with them(market value if you like). If you have existing stats on click-through rates of ads on the page you could conjure up a sensible number based on the two combined.

 

[Mike Lewis]

Intrepid and Mark,

Many thanks to both of you for those useful replies. I postponed responding to you until I had a chance to discuss your comments with my client, which I have now done.

He is now taking the view that he doesn't want to get involved in click-through rates, or even in per-impression rates, but would prefer the simpler model -- simply displaying a banner of a given size for so-much per year. He likes the idea of "simply selling the space", sending out an invoice, and forgetting about it until renewal time comes round.

On that basis, he would go for Interpid's Option A. He was encouraged by the figures you suggested. The hit rate of his home page is about seven times the 2.5 - 5K you mentioned, and he had been thinking of about £150 per year, for a constant (non-rotating) banner across the top of the page (as opposed to your £300 for three months combined banner / skyscraper rotating).

Of course, he accepts the audience composition won't be the same, nor would the value of whatever product or service the advertiser is selling. But it's a good starting point.

I'll have another chat with him later in the week, and let you know how things develop.

I am far from being an expert in these matters (just because I helped build the website, he assumes I am knowledgeable in all web-related disciplines),which is why I especially appreciate your good advice.

Mike

 

[Power Lunch Club]

I hadn't read this thread earlier....it's really useful for my own website company promotions....thanks one and all.

 

[Mike Lewis]

Just an additional note ....

I would never advise selling advertising space on your main corporate website, that is, on a site whose main aim is to promote your company's own products or services.

If you did, you would be competing with your advertisers for your visitors' attention. If the advert succeeds, it can only distract people from the main purpose of your site.

In the case we've been discussing in this thread, the site contains technical information of interest to other company's in my client's industry. Its aim is to dessiminate information while raising the client's reputation and awareness. The client feels - and I agree - that it won't hinder their own marketing, especially as the site's visitors are not potential customers.

Just thought I'd make that clear.

Mike

 

[stuarty]

Mike,

Am I reading you correctly? He wants one ad (non rotating) that will occupy the masthead for a full year? So this means all he'll ever obtain is £150 for this?

I don't see the logic in this. Bear in mind the following;

1. Advert blindness - hitrate of the site regardless, the advert will become transparent to visitors over time and typically becomes useless after a couple of months.
2. Not measuring clickthroughs, impressions doesn't give the advertiser any measurable data. I'd want to know ctr and impressions for any display ad I had on a site so that I could add this in my metrics calculations. For example - if it was really effective and converting well I may wish to improve the ad and use the data on other websites. Without data the ad is not helping me as an advertiser at all.

Someone mentioned above (Intrepid I think?) that a site has to have >10k hits a day or be designed to be effective. I'd really have to disagree with this. We have many sites that only get 20-30k hits a month that do very well from monetisation through display ads and google ads. If you recycle your adverts and place them on known good CTA areas in the page then you can outperform many high traffic sites.

Many high traffic sites suffer from "advert blindness" or "advert apathy" in the masthead and sidebar areas. We know this from eye tracking results whereby the vast majority of visitors ignore the advert completely. Web users have become 100fold more savvy towards adverts in recent years.

There are brilliant ways and means such as placing ads in the footer that can get you decent clickthroughs. Changing the css of the Google ad can also improve clickthroughs.

I don't agree about keeping your business website advert free. We have advert real estate (not currently active) on our own website which we use for client trials or new ways to test eye tracking, heatmaps etc. On top of any commissions, they provide us with extremely valuable data which can be used for client projects.

We do surprisingly well from advertising wordpress themes or website templates. (We develop bespoke wp themes and do wp SEO.) From the network we build around these adverts we get what I would describe as "longtail" referrals whilst being paid. We also get a small number of very high quality links on the back of some adverts - it works as a form of flattery. If you allow advertising on your own website, it can work favourably if you are clever about it.

Another thing about having adverts on your business site is to have ads that look like 3rd party competitors that click through to your own pages or landing pages. If you want to promote a different service from your home page say. Overall your site becomes stickier and TOS metrics improve.

One other trick to use....bear in mind that people have to leave your website eventually. How many times have you been just about ready to leave a website and you see an eyecatching ad at the bottom of the page? Why not give them an advert to click on the way out? You might as well make some money when they leave.

 

[Employment Law Services]

Someone mentioned above (Intrepid I think?) that a site has to have >10k hits a day or be designed to be effective. I'd really have to disagree with this. We have many sites that only get 20-30k hits a month that do very well from monetisation through display ads and google ads. If you recycle your adverts and place them on known good CTA areas in the page then you can outperform many high traffic sites.

Just to be clear, what I said was a website would need to be getting >10k visits/day before an advertising agent would take them on.........I agree that sites getting far less traffic can still monitise their advertising real estate.

 

[Mike Lewis]

Stuarty,

I appreciate your comments, but I'm not sure how applicable they are.

You are clearly approaching this as a marketing professional -- and rightly so. If you were called in to advise a client on this issue, the points you raised in your post would be very valuable to them.

But my client isn't particularly interested in Internet marketing or making money from a website. Rather, they've received occasional enquiries from people who want to advertise on their site, and they wanted some guidance on how much to charge.

You said "He wants one ad (non rotating) that will occupy the masthead for a full year? So this means all he'll ever obtain is £150 for this?" (my italics). No. It's not that he wants this. The figure of £150 was one that he more or less plucked out of the air, and he wanted to know if he was in the right ball park, He didn't have any idea about whether it should be a non-rotating banner or whatever. I just used that as a basis for comparison.

Having said that, I will pass your comments on to him. But I suspect he will opt for the simplest solution, even if that doesn't maximise the income.

Mike

 

[stuarty]

But my client isn't particularly interested in Internet marketing or making money from a website. Rather, they've received occasional enquiries from people who want to advertise on their site, and they wanted some guidance on how much to charge.

No problems Mike - hence why I asked I was unsure. It was posted in IM and I presumed it was for IM purposes.

To be honest though - if he's not bothered then why not just give the space away for free?

 

[stuarty]

Just to be clear, what I said was a website would need to be getting >10k visits/day before an advertising agent would take them on.........I agree that sites getting far less traffic can still monitise their advertising real estate.

Cool, and I understand about advertising agency fees and traffic minimums but I was referring to;

In my experience Google Adsense pays virtually nothing unless your site is specifically designed for it and is getting loads of traffic >10k visits per day.

Sites don't need to be specifically designed for Adsense or have greater than 10k visits per day in order for them pay. Maybe I got the context of what you wrote wrong?

 

[Mike Lewis]

Stuarty,

It was posted in IM and I presumed it was for IM purposes.

Fair enough. I didn't really know the best place to post it.

To be honest though - if he's not bothered then why not just give the space away for free?

Well, I wouldn't repeat this in a public forum, but that was my private opinion as well. If it was me, I'd put all my effort into running the business, and not get distracted by peripheral activities. But, since he asked ....

Mike

 

[Employment Law Services]

Cool, and I understand about advertising agency fees and traffic minimums but I was referring to;



Sites don't need to be specifically designed for Adsense or have greater than 10k visits per day in order for them pay. Maybe I got the context of what you wrote wrong?

You're spot on with that one mate :blush: You're absolutely right, you don't need to be getting >10k visits a day for Adsense to pay out but are you sure about the 'design' aspect of things?

Wouldn't a site specifically designed with ads strategically placed to drive click thrus make more than a site that simply had ads down it's left or right margins or across the top of the web page? That's kind of what I meant about Adsense being useless :001_smile:

I've seen these 'ready built' sites on E-bay that seem to be specifically designed to make money from a combination of Adsense and other affiliate programmes - its almost like you have to click an ad to move anywhere!! Obviously your site needs to be getting traffic in the first place!!

 

[Tim Barlow]

If you are thinking about giving space away for free, then apart from letting me have the space, one low maintenance approach is to sign up with a few affiliate schems through the likes of DGM or commission junction.