How Much Should You Charge for Banner Ads On Your Website

I am writing this article in response to a question that was sent me that goes..

“Hi Mr Sencio. I’m just wondering where you are based because my question has something to do with where I’m from which is here in the Philippines. I made a website and I want to start asking sponsors to help me pay for my own domain. How much does a website charge for ads?”

First of all there “there are no standard pricing structures across the Internet” for banner ads. The only way to determine how much you should charge is to see how much other sites just like yours are charging.. and by other sites I mean, websites with similar traffic, demographics, banner sizes and location on the page or on the website.

Traffic
Advertisers are paying for exposure on a website, so they put their ads on websites that have traffic. If your website does not have any, it is likely you will have a hard time getting anyone to book ads on your website.

Demographics
More than just exposure, advertisers want the right exposure. They want to reach out their target audience who are the people they see buying the product or service they want to advertise.

Banner Sizes
There are many different standard banner ad sizes, and pricing is obviously also influenced by size. The bigger the size, the bigger the ad creative you can use, and the clearer an advertiser’s message may be read by the web site’s visitors.

Location on Page/Website
Where a banner ad is found on a page, or what page on the website also affect price. Think of banner ads as billboards; the ones that are easily seen by motorists and the ones that are on a busy street usually cost more than those that are not immediately visible or those that are in back alley.

Banner ads found visibly near the top of the page or anywhere above the fold (the lower edge of the visible webpage before a visitor scrolls down) are usually higher in cost. Furthermore, banner ad locations on the main page or pages that get the most number of views usually cost higher than other pages that have less page views.

Whether you are in the Philippines, the US or anywhere in the world, banner advertising is an Internet commerce channel that knows no boundaries and more importantly largely unregulated with standardized pricing. It really comes down to the value that your website offers to potential advertisers and being able to convince them spending their ad budget on your site is worthwhile, otherwise they can easily find another website that is cheaper than what you are offering and may beat you in the aspects of traffic, demographic, size options and site and page placement.

How Other Websites Charge?

Flat Rate – Where you simply charge a monthly rate for the exposure you are giving them on your website.

Per CPM – A little more complicated, it stands for cost per thousand, where an advertiser pays a certain dollar amount for a thousand impressions. This is often the standard method used, and common among large websites with a lot of traffic and a lot of potential views of these pages.

Per Click – As it suggests, an advertiser pays a certain amount each time the ad is clicked by a viewer, a little more complicated to implement and needs more advanced software and tracking mechanisms in place.

What to Do Next?

Start promoting your website in order to get more visitors to it. You should also have some sort of tracking mechanism in place for you to see how many visitors are getting. Later on you would need to determine the demographic of your visitors, and that is largely influenced by the content of your website and how easily your website is found through links on other websites or through search engine listings.

Lastly, I am a Filipino in New York City.КартиниИдея за подаръкикониПравославни иконииконописikoni

Three Questions to Ask Before Buying Banner Advertising on a Website

Buying banner advertising on websites is a very popular method of online advertising. To put it simply, it is the act of placing a banner ad about your business, products or services on another website for a fee. Banner advertising can be effective and profitable, but before you do decide upon buying ad space, ask yourself these 3 questions.

Does the Website Have Any Traffic?
The main reason you advertise on a website is exposure, and if a website does not have visitors, then you likely won’t get that exposure.

Most websites that sell advertising space on a regular basis have information about their site that will help you make a decision. This information is found in a Media Kit, that you can download or send an email or contact request for.

So the first thing you can do if you want to advertise on a website is see if they have a page where you can find, download or request for that information.

The Media Kit typically has an overview of their visitors, with general traffic figures, the types of advertising they accept, rates and other advertising terms. Some may go into more detail and reveal visitor demographics.

So what about the ther web sites that do not offer a Media Kit? You can ask the website owner or administrator for traffic information.  Ask them for a copy of their Google Analytics stats. If they refuse, then take your business elsewhere. If they do agree to give you Google Analytics data, try to get data for the last 3-6 months. What you are trying to determine is consistency of traffic, and what their general traffic sources are. A good sign that a site is a great place to advertise on is if they have consistent traffic and a huge number of them come from Google searches, and referrals from other websites.

Is the Website’s Traffic the Type of Traffic You Want?
Sometimes it is not about the quantity, but the quality of visitors. You need to verify if the visitors the website gets are the type of visitors you want to reach out to and would be interested in your products or services. This is where demographic information can come in handy. A website that regularly sells banner ad space almost always has information about their visitors like gender, age, status.. or even education and individual or household income.

If a website cannot provide you with such information, you can try various free tools online that can give you insight into their visitors, one tool you can use is the Google Ad Planner. To use it, all you need to do is type in website you want to do research on in the space, then hit the blue arrow beside it. You will also see traffic estimates using Google Ad Planner but this will not be as accurate as the site’s own traffic statistics.

Is the Price, Right?
There are typically three ways you can pay for banner advertising.  One, is simply an agreed fixed rate on a monthly or weekly basis. The second is by CPM, short for cost per thousands where you pay an amount for every 1000 impressions of your banner. An impression is one instance when your banner ad was displayed because the page it is found on was loaded on a visitor’ browser, which is what happens when a visitor landed on that page. So if the rate is 50 cents CPM, and you get 1000 impressions in a day, you pay a total of $5 for that day for those impressions. Third is per click, where you pay for every click your banner ad gets. There is no “better” means among the three, and it would depend on your costs and conversions and your being able to determine which method gives you the least expense per conversion.

Rates for banner advertising are not regulated, so a website can actually charge as much as they deem they are worth. What’s funny is some websites charge too much for ad space even if they do not have the traffic to make the placement worth the expense.

So one way to really be able to get a grasp how much to pay is to first get rates from different websites and make a note of how much traffic they get, and what kind of traffic they have. This will give you an idea what the rates are for websites of a certain size and who get a certain amount of traffic. You also do not need to target high traffic websites, you can find smaller websites that have fewer traffic, but it’s visitors may be the exact market you want to reach.

More than just getting traffic through advertising, you want to get converting traffic; visitors that becomes leads or customers.

That said, it is important to note that different websites may charge different rates, and at the end of the day you don’t go with the website that offers the best price, but the website that delivers an ROI.

What you would need to do is always ask to do a small test first before taking on a full blown ad package. This way you can determine if the traffic you get converts. As a test, you can run ads for a week or two and spend less. This way you get a sample of their traffic and determine if that web site’s visitors will respond favorably to your banner ad and your products/services offered, without you having to pay the full advertising amount.

If the website does not allow tests, ask them if carry an opt out clause in your contract, which will allow you to cancel your arrangement within a certain span of time if the advertising placement does not work for you, does not yield any conversions (leads or sales) for you. You will then only need to pay for advertising for the duration that your banner ad was live on the site.

To be a smart website or online business owner, you need to make some smart decisions especially with online advertising. Smart decisions can only be made if you have the necessary information that help you make an informed decision to do a small test, that if upon delivering good results, you can then scale up into a full blown banner ad campaign on that website, taking advantage of their visitors whom you have found to be that targeted audience you seek for what it is you are offering.

Google Ad Planner: Handy Tool for Media Buyers Online

Google Ad Planner

is a helpful free tool from Google that allows you to easily identify websites are the most likely to attract your target audience and is especially useful when you plan to purchase advertising or banner ad space on other websites.

My first online marketing related job was as an Online Media Buyer position and what I did was manually find websites that would be ideal to put banner ads on; scour the search engines using certain keywords and make an extensive list on a spreadsheet with all the sites and their Alexa rankings; note what type of ads they had and their sizes and locations on a page; then contact and negotiate rates. Part of the correspondence involved asking them about their traffic, getting information about their visitors such as demographics. Sometimes you get glossed up information, that you would be unable to verify. It would have been good at the time to have another website that had data on a website’s traffic.

Today, Google Ad Planner makes research easier. It enables you to define audiences by demographics and interests and through that information, create media plans that would reflect your audience’s online behavior and identify the right websites to place his/her advertisements.

Here is a video that gives you a quick overview of Google Ad Planner.

Banner Ads or Pay Per Click Advertising?

Banner ads or Pay Per Click advertising? Are you trying to decide which medium to advertise your business on?

I thought of writing this post after some time trying to explain to a friend of mine over Yahoo Messenger how one is different from the other and I realize a lot of people are undecided when it comes choosing which online advertising medium to use.

So if you were to advertise a product or service, what would you choose… banner advertising or pay per click?

For those who are new to this, let me give you a quick description of each.

Banner advertising is simply the process of purchasing banner space on other websites for you to display a banner about the product or service you wish to advertise.

When choosing the right website to advertise on, you have to take into consideration the website’s traffic (how high or low, and their demographic), how many page views or impressions your banner could get, if the website is using an ad-serving software that allows you to control delivery options, and of course cost which can either be in CPM (cost per thousand impressions), monthly fee or CPA (cost per action).

You can either do the research yourself, by identifying the right websites to make banner ad placements on, or you can advertise through an ad network which have a network of websites who will publish your banner ad on their sites.

Pay Per Click advertising on the other hand is the process of advertising on search engines such as Google. All major search engines have an advertising feature that allows you to advertise on them, but I will talk about Google AdWords since the latter enjoys 65% market share, a commanding lead over Yahoo, MSN and other smaller and regional search engines.

Google AdWords gives you two advertising options, advertising on their Search Network or the Content Network.

If you advertise on Google AdWords’ Search Network, your ad which is in text format, appears only when a keyword you are bidding on, gets searched. Keyword searches trigger your ads. These text ads are typically found in the upper box and the right side box that surround the regular search results. You only get billed by Google if someone clicks your ad, hence pay per click, and you only pay the amount your are bidding, or less, never more.

If you advertise on the Google AdWords Content Network, you can choose to place text, image, or media type ads on websites that belong to Google’s AdSense program, this is a network of websites that publish ads served by Google’s Content Network.

Google AdWords has since inception, added more targeting and payment options to include CPM and CPA, other than pay per click.

What is similar for both banner ads and pay per click ads is that, when the view clicks the ad, the viewer/clicker is taken to your website, or a page on your website specially created to get the visitor to perform a conversion; this is commonly known as the landing page.

What is significantly different for both, aside from the manner of distribution is that banner ads appear to the viewers of the page where the banner ad is found. PPC ads however only appear when a search engine user types in specific keywords, thus presenting itself only when there is a demand. This often yields to higher conversion rates because your service or product is put in front of a search engine user who already has a demand for that type of service of product.

One might be quick to conclude that PPC advertising would then be more effective than banner ads, but banner ads can actually serve a different purpose.

To answer the question about which medium to go with, I would say go with both.

Banner ads tend to work more effectively with high volume websites simply because the impressions are served to all website traffic which are not necessarily as targeted as a pay per click ad served to someone who is in the research phase of a buying process.

Thus, banner advertising can actually help a campaign if its goals are more branding and recall in nature and may not require direct response as a conversion goal, but will still deliver conversions but not as high a percentage compared to conversion rates delivered by pay per click ads.

At the end of the day, any business owner, marketer or advertising specialist is after one thing, return of investment, and the medium that delivers that ROI, after proper campaign planning and optimization, would have to be the best medium to use in advertising your business, regardless of what others may say.

If you have any questions about banner ads, pay per click or other forms of online advertising, feel free to leave your question in the comment section below.