How to Price Advertisement Placement in your Website
If you own a website that is fairly popular and consistently receives relatively large of visitors everyday, you may want to monetize it by placing advertisements.
You could put pay per click ads from popular third party provider like Google Adsense. Using Google Adsense, you don’t need to worry on how much you would price the advertisements that will be placed in your site since Google will do it for you.
On the other hand, you could also accept advertisements from whom who contacted you and wanted to place advertisements in your website. This should gave you a better income since you don’t have other third party, like Google, to share with what the advertiser have paid for the ad placement. But, how are you going to price this ad placement?
When pricing ads, the price should be competitive and fair. It should not be too low to loss you some opportunity to earn better. And, it should not be too high to make your advertiser to look for other publisher who could offer him/her a lower advertising cost.
To price your ad space, you have to have a benchmark. The best benchmark is, of course, Google adsense. You may use my computation below as a model.
First, try to measure the number of page views in your website. You can do this by installing hit counters.
Based on experience of some publishers, the average cost per click on Google adsense ad is approximately US$0.1. Also, on the average, click thru rate on the ads is in the range of 1% - 5% (based on 1 ad unit per page) of the total number of impressions, but try to use the average, 3%. You can change these values using your own adsense data, if you have one. The impressions can simply be assumed to be the number of page views (not number of visits).
Therefore, the price of placing advertisement in your site is
(1000*3%*0.1)/78.5% =3.82 Or simply US$3.82 per 1000 page views.
78.5% is the percentage shared by Google to its publishers from every revenue they earned from advertisers (based on http:// www.webmasterworld.com/forum89/11568.htm).
You may observe, based on the formula, that what you could earn from Google adsense versus what you could earn from direct advertisers should have not much difference.
Filed in: Adsense/Web advertising
Local date: July, 2009
