Fixing blog advertising rates for your blog can be very tricky. Contrary to what a lot of emerging bloggers may think, there are no standard advertising pricing structures on the internet.
As a matter of fact, almost every conventional media website, top blogs, news site, YouTube – virtually every website with quite an amount of audience uses advertising.
Advertising is a proven moneymaker and as long as you have an audience and companies you want to reach, you have the prospect to make money selling ads.
However, there is no calculation that can tell you the exact price to charge advertisers for your blog. The surest way of calculating the right advertising rates for your blog is through experimentation.
On one hand, you should not charge too much else you end up with no advertisers at all and on the other hand, you should not charge too little else you lose out. Simply put, you should not overvalue or undervalue your blog.
When deciding the amount you should charge for advertising on your blog, you should consider some factors can affect your rates. These factors, among others, include:
- Audience Engagement
- Geographical Location
- The specialty of your niche
- The type of Ad
The type of ad (image, video, text, etc) can affect not just the price but the placement and payment structure (for example, pay per click (PCM) vs. pay per impression vs. flat-rate).
For example, ads placed below the fold should cost less than ads placed above the fold. The challenge, however, is finding the right price in order to maximize your earnings.
This prompts the question, how can one know the right price to charge for each type of ad that will be published and in each possible location where the ads can be displayed to visitors?
There are some methods that can be used to draw an initial price tag and some specific places you can look to cross-check the numbers. I will cover some below.
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1. Defining the metrics: (The CPM)
Let us assume we have two blogs named blog A and blog B. If blog A charges $500 monthly for a 125 x 125 banner above the fold while blog B charges $1,000 for the exact same spot, should we say that blog A offers a better advertising deal?
The big answer is NO. This is because the value that the advertiser will get will depend on so many factors of which the traffic that both blogs receive monthly tops the list.
If the blog A generates 100, 000 monthly page views while blog B generates 500,000 monthly page views, and the advertiser would most likely purchase the advertising space of blog B for $1,000.
As you’ve seen, the answer to our question came from a very simple ratio. That is, the cost of the advertising space divided by the number of traffic that the ad will receive.
A lot of metrics can be used to define traffic, ranging from unique visitors to page views and visits. Although, most publishers prefer to use page views.
Also, it is common to measure page views per thousands, so you can talk about cost per 1,000 page views or impressions. The term for that is CPM which stands for Cost per Mille.
To conclude this example, if you do the calculation, you will see that the first blog has a $5 CPM while the second one has a $2 CPM.
This isn’t to suggest that you should tie your Ad rate solely to the number of monthly impressions of your blog. Offering a flat monthly rate to advertisers is usually the simpler way to go about your advertising rates.
However, it is very essential to keep the CPM numbers in mind because they will enable you to when comparing prices with that of other bloggers.
2. Analyze the rate of your competition
The internet is a large market place where all websites are subject to the laws of supply and demand.
Simply put, if you set a price that is obviously higher than that of other blogs in your niche, your potential advertisers will go somewhere else.
Therefore, the first thing to do is to take a look at blogs related to your niche that sell advertising space in order to evaluate the rate they charge.
In order to be consistent throughout your research, you should pick a format and position that is popular because these are factors that will directly influence the final price.
The 125 x 125 button ad on the top of the sidebar is the most used format among blogs selling direct advertising ad space; it should fit for research purpose.
For instance, if you visit the advertising page of JohnChow, you will find that the blog generates over 300,000 page views, and a 125 x 125 button on the sidebar costs $500 monthly.
Divide $500 by 300 (remember that 300,000 is equal to 300, that is, 300 page views) and you get a CPM of $1,66.
Similarly, if you visit Copyblogger, you will find that the 125 x 125 button ad costs $1,500 monthly and, and the blog generates over 1,000,000 page views. Again, just do $1500 divided by 1,000 and you get a CPM of $1,66.
As you can see, CPM of $1,5 for the 125 x 125 buttons is a good average and would be perfect for a starting rate.
3. Adapting to your won situation.
The mentioned blogs are all viewed as authorities in their niche, which affects how much advertisers will be willing to pay to get their desired exposure to their audiences.
If you’re just starting a blog or you are just beginning to test the waters with direct advertising, it is advisable to start with a lower CPM and as your blog grows and more advertisers begin to come, you can gradually increase it.
You should consider using real page views for our evaluations as most web statistics programs and software most times overestimate the traffic on your site. The most reliable one, however, is Google Analytics.
4. Cross-checking the numbers and experimenting
You can join advertising networks like Google AdSense that is CPC based or CPM based in order to check the numbers with an external source and use it on the spots where you plan to sell direct advertising.
Most direct advertising deals should bring you more money than what advertising networks do.
This is mainly because you are negotiating directly with the advertisers and cutting out the commissions.
5. Direct Advertising
A popular and simple formula for calculating blog advertising rates is to divide the number of daily visitors to your blog that can see the ad by 10. It makes a very consistent income stream.
What you charge your advertisers is a supply and demand relationship, mixed with your ability to get exposure to the right advertiser. You are free to charge as much as you want as long as you deliver value to the advertiser.
This can also be called flat-rate. This form of price tag is better because it is a fixed and standard rate, unlike the CPM and CPC pricing model.
Once you have been able to establish a price tag using this formula, you can then create a subscription for your ad space.
The YAIOA subscription tool is a multipurpose tool that can help you achieve a lot of things like selling ad space on your website.
To get started, you only have to register as a VENDOR on the platform and create subscription plans for your ad space.
This is where you put in the price and description of the subscription, tell the subscribers why they should advertise on your site, the traffic you have, the format of the ad (e.g. 468 x 60, 120 x 600, 125 x 125) and the position (e.g. header, sidebar, footer, blended with content).
If possible, share a screen of your Google analytics. This is going to help in convincing them to place ads on your blog. Once this is done, you can now save your subscription.
When they see your site, they will click on the button which takes them to where they can make payment for the ad space. You can then place the banner on your site for it to run for the duration that was paid for.
Registration is free and you can have more than one subscription and subscribers. The more, the better. This is a win-win situation!
It is now over to you to recognize blog advertising rates, methods, and strategies that may work best for your blog. Feel free to let me know the methods you have used on your blog and how well they worked out for you.
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