A common banner ad package consists of 100,000 impressions and costs from $20 to $100 per thousand impressions. Rates from $25 to $70 cost per thousand (CPM) are average for popular sites.
Remember, most sites have repeat visitors, and most visitors view more than a single page per visit, so 100,000 impressions might represent 10,000 to 30,000 unique visitors.
In some cases, impressions are guaranteed; in others, they are estimated. Some sites will charge a flat rate for estimated impressions. If the delivered impression count is higher, some sites let their advertisers keep the “overdeliveries” at no extra charge.
Other factors that affect banner ad rates include:
Banner size. Industry standard banners sizes are 728×90, 120×600, 300×250, 88×31, 468 x 60 pixels and 234 x 60 pixels. Larger banners cost more. You can put a limit on banner file sizes(7 kilobytes [KB] to 10 KB, for example) to keep download times to a minimum.
Supply and demand. Ad space on sites that appeal to a prime target audience can fetch a higher price than space on sites targeting a broad, general audience. Depending on your industry, your site’s branding and the availability of your inventory, you can develop an appropriate fee structure.
Competitors’ rates. The best starting point for determining what to charge advertisers is to learn what sites similar to yours charge. If you feel you can afford it, you might want to offer a slightly better price at first to attract business. The easiest way to do this is to call a company and ask. Companies serious about business list phone numbers on their Web sites.
Audience profile. The more targeted your audience profile, the more you can charge. The more targeted your advertising is, the more you can charge. For example, on the Wall Street Journal’s site, you’d pay $64 CPM for advertising on a specific site within WSJ.com, $79 CPM for running a banner ad to coincide with editorial content on that site that appeals to certain viewers, and $98 CPM for targeting your audience based on profession, gender, industry or company size.
Statistics. If you can show advertisers visitor return rates, average length of visit, average pages viewed per visit, click-through rates, viewer-to-customer conversion rates and so on, you can give them a feel for the loyalty of your site visitors. This justifies higher pricing. You can get this information by using traffic analysistools.
The most common pricing model for banner ads is cost per thousand impressions CPM. Cost per impression, or CPI, is basically the same metric: Divide the CPM by 1,000 to get the cost per impression.
Cost per action (CPA) pricing is any formula in which advertisers pay not for viewership but when visitors perform a certain action in response to the ad, such as filling out a registration form, entering a contest or making a purchase. Advertisers often like this pricing model because they pay only for measurable results; they pay per customer action.
The strategy might be risky for you, though. A poorly designed ad might not generate any clicks, so you’d end up not making money because of your advertiser’s poor design or copywriting abilities. Keep in mind, too, that the site being advertised on is usually expected to track customer actions; advertisers do not have access to the site’s log files or to the information provided by the ad serving company, if there is one.
Cost per click (CPC), a form of CPA pricing, is a good pricing model for sites just starting out. Because there’s less risk to the advertiser, this model is often more appealing to advertisers who haven’t done business with you before. After your site gains momentum and begins to show more value in terms of traffic and number of advertisers, you can graduate to CPM or CPI pricing.
CPM and CPI pricing make the most sense when branding and/or customer awareness are among the ad’s objectives, and when advertisers know they’re reaching a highly qualified and desirable audience regardless of whether any immediate action is taken. After determining whether you’ll base your rates on CPA, CPC, CPM or CPI, you’ll take that information and develop your rate.
Tags: banner advertising, banner rates, cpi, cpm
SeoSem’s Twitter Stream
CPM advertising rates and how to calculate the CPI
Tags: banner advertising, banner rates, cpi, cpm