Value of a site for advertisers?

[Dan Kaplan]

Hopefully, someone can provide some insight through either experience or observation...

My basic question is how does one go about calculating how much advertising space on their site is worth?  Up till now, the only banners I have hosted have been affilliate pay-for-sales (i.e. free impressions) types.  I have mostly gone away from any such advertising.  Yesterday, I talked to someone who is going to pay me a set amount a month (I'm not sure it's appropriate to say who and how much), plus offer me assistance in several promotional areas.

Then, out of the blue, I get an email from someone today asking how much it would cost to advertise on my site.  My basic response was, "Gee, I don't know.  What do you think is fair?"  Ok, so I went into a little more detail, but I couldn't think where to even start in terms of coming up with a number.

Are there resources (aside from marketing specialists) that deal with this sort of thing?  The downside to actually making money on the site is that it will boot me out of the "non-profit" category and I'll have to pay for several scripts I use...    But, there's always a silver lining -- this'll probably prod me in the direction of moving to a bigger account to make use of MySQL, so FutureQuest will see some benefit!  

If it helps any, the site in question is http://run-down.com and it averages about 150 visitors and 1,000 page views a day.  I've got something tentatively in the works with someone who is positive that our "partnership" will increase my traffic tenfold, but it's too early to count on anything materializing there.

Thank you in advance for any help,
Dan

[Dan Kaplan]

Does the silence mean I asked too tough a question, or is no one interested in this subject?

Dan

[Rich]

Advertising is not my area of expertise, but I'll tell you what little I do know.

Asking how much to advertise for banner space is kind of like asking how much to sell a product for--it all depends. The short answer is that you charge the maximum that the market will bear and that also will maximize revenues. Site poularity, available inventory (of available banner space), and the cost of site operations, are usually the major factors used to determine rates.

Rich
[This message has been edited by Rich (edited 12-29-99@10:08 am)]

[Dan Kaplan]

Hi Rich,

Thanks for the response.

Asking how much to advertise for banner space is kind of like asking how much to sell a product for--it all depends.

Well, I knew it wasn't an easy question.  

Trust me, I've studied far too much supply and demand for one lifetime...  The problem I'm having is what to compare to initially?  I've got popularity numbers, available ad space, and overhead figures, but that gives me three equations and three unknowns, so to speak.  Not knowing how much future advertising possibilities there will be, I'd rather not turn people away early by pricing too high.

Thanks,
Dan

[sheila]

Here's an idea:
Try contacting other sites as though you were interested in advertising with them, and asking them for their rates to place *your* banner with them. You could say that you're "just shopping around" or "looking into it" or something. Use a throwaway yahoo or hotmail addy if you don't want to keep getting junkmailed later on.

You could try finding out what factors they base their charges on and so forth.

[Justin]

I second Sheila's idea - that's what I did for HostFacts.com - I checked with all of the hosting directories to see what they were charging, and based mine off of that (though I went a little lower in price)...

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Justin Nelson
FutureQuest Support

[Dan Kaplan]

Thanks for the suggestions(s).  I'll either try that approach or alter it slightly by being up-front about it, explaining the situation, and asking how they price things.  If that doesn't work, then I'll fire off a freebie email address.    I'm sure they won't catch on to that one...

Reminds me of several years ago when my mom had a video store and my cousin and I were calling other stores to get an idea of how much they charged, hours of operation, late fees, etc.  We split the questions in half, and we would alternate the questions we'd ask with each place we called (we spaced out the order of the calls so as to not be too obvious).  So, my cousin's calling "24 Hour Video" and going through the questions.  Then he asks, "what are your hours?"  A moment of silence at the other end, then my cousin realizes what he said and hangs up before completely losing it.  Ahh yes, the memories...

Dan

[auteur]

Here's some suggestions that will help you...

You can either sell space based on impressions or click thrus.

Many of the bigger sites do both. It all depends on the deals/package plans that are set up.

Here's the difference:

Impressions:
The advertiser pays based on the number of times their ad appears [or is viewed]. This is usually in the favor of the site owner as the impressions don't always mean the visitor left the site by clicking on the banner.  Impressions can be sold in thousand lots. After the impressions equal the number paid for the banner is pulled.

Click-thrus:
The advertiser pays based on the number of times their banner is clicked on. This is better for the advertiser, as this means their site was at least visited.  Click thrus can also be sold in the thousands, though they are stated as CPMs. After the click thrus add up, the banner's pulled.

Actual cost depends on your site's daily visitor rate. A ten cent CPM is pretty good. 25 cent CPM is kinda high.

Hope this helps..

Elizabeth
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Elizabeth M. Miller
Getting You the Attention You Deserve!
www.123marketing.com

[Dan Kaplan]

Hi Elizabeth,

Thanks for the response.  The click-thru approach seems the most straight-forward to establish a price.  Of course, it's also the one I'm basically moving away from.  Although, individualized advertising would probably meet with at least somewhat better success than run-of-the-mill affiliate banners....  I fail to see how anyone finds those profitable.  What's the average click rate, 0.1%?  I've seen it written that the most cost effective advertising is to create an incredibly bland banner -- just a white background and the company name -- and go for maximum exposure with a large affiliate program.  Lots of people will begin to recognize the name, but no one will click on it -- thus, you'll pay nothing for the advertising -- because it's so dull.  Sort of a subliminal approach.

Back to my question...  I still haven't seen any numbers to begin with for basing advertising on impressions.  The 10 cents per click seems pretty common, but I've yet to see corresponding numbers for impressions???  I've got a couple of requests in to advertising-familiar people in the running field, so I'm hoping they can shed some light on this aspect.

On second thought, was your last sentence referring to both impressions and click-thrus, or just click-thrus?

Thanks,
Dan

[auteur]

Here's a clarification:

Impressions - CPM can be $25 - $30 for highly targeted sites
                         $5 - $10 for a less targeted site

Cost per Click [corrected term from my last post]
depends...can be 5 to 10 cents on up to $2.00. As an advertiser it depends on the product you're selling. According to my Ad buy dept, if you're selling a Mercedes Benz you'll want to the $1 to $2 range; if you're selling beanie babies you'll want the 5 to 10 cent range.

So based on that information, think about who would be advertising on your site. Are they going to be high-end producers or low end? Is the audience your site is targeted to high-end buyers or low end? Use that information to determine the price for advertising.

Hope that helps...

Elizabeth