How to determine advertising rates

[agenda9]

I've had a couple of inquiries from people looking to buy advertising on my site. So far, affiliate programs are the only means I've used to make any money -- and if I'm lucky I may make enough to cover my hosting fees.

But I think selling banner ads may work for me, but my question is where do I start to figure out what to charge?

[MWCren]

A couple of thoughts about unsolicited requests to buy advertising on your site:
First, they are often an email address phishing scam. They will try to get your reply to confirm a valid email address and you'll never hear from them, other than to find out you're now on a spam list. Do a whois check on the "from" email address, and then if it looks odd, delete it and don't reply.
Second, they are also a common affiliate program marketing trick/scam effort. You reply and they send you information on their affiliate program, not paid upfront banner ads. Again, do a whois lookup first, check out the site and see if it looks like a good match.

To determine your banner ad rates, you will probably need to look at your unique page view stats, perhaps calculate your estimated number of clicks on a banner by using current click through numbers to your affiliate links you have now. If you get 500 clicks on a banner during a month, then I'd say 10 cents per click is not out of whack with current rates. So that would be 50 bucks a month for a fixed banner placement.

If you don't have that information, you might try to generate it by putting a banner somewhere you think people would pay to be, and then track the clicks on that banner. Just remember that prime placement will be the request of anyone paying for fixed banner position advertising.

If you're making more from affiliate sales than you might from fixed banner ad sales, then stick with affiliate links and banners. You definitely don't want to accept advertising from a site/sponsor that is not compatible with your site, so be choosy and be cautious. Money up front from first time advertisers is a good rule to follow.

[basschick]

i don't think 10 cents per impression is very reasonable unless you have very high quality traffic. what's more, if you charge that much, you aren't likely to see a lot of repeat business. after all, a great ad will still only pull in 20% if it is in a great location and is a truly stellar ad. most will pull maybe 5% or less.

10 cents per clickthrough is more reasonable, although still much higher than i would pay per click except to google or sites with extremely targeted traffic. otherwise i'd say 1 - 2 cents per impression, maybe 3 cents per impression if you have spectacularly targeted traffic (like all gay foot fetish) 2 - 5 cents per click, 6 cents to 8 cents maybe if it is highly targeted.

[Lee]

Take the largest amount you have made in a single month then..

Divide that by the amount of hits you got in the same month.

For example, say you made $100 on 5000 hits..

$100 / 5000 = 0.02 per click + 10% = 0.022 per click thats what your rate should be around, IMHO.

Of course, if demand is high, as with anything, the price goes up, if demand is low, the price goes down.

Once you have a solid stats base, you can 're-work' the figures

Regards,

Lee

[agenda9]

All great suggestions... thanks all!