Publishers want to know what their traffic is worth. Advertisers want to know what a campaign will cost. Both questions come down to the CPM: the price of 1,000 impressions.
Four steps to set your advertising rate
- Set a service rate. Decide what your time is worth per hour. Include office space, staff and tools, and leave a surplus.
- Estimate the time a campaign needs. Some sellers charge per hour, others per campaign. A per-campaign fee should match your hourly rate.
- Price your placements. Each placement has a different value: a header banner is not a footer link. Price them separately.
- Combine the two. The total rate covers your service and the placement itself.
Five questions that predict a site's CPM
- Is the site "sticky", or a one-hit wonder that visitors use once, like a reference site?
- Is it general, or focused on a valuable category like cars, finance or betting?
- Who visits: everyone worldwide, or mainly the US and Western Europe?
- Does it depend on Google search, or does a community bring people back?
- How many pageviews does it have?
Easy and hard sites to monetize
The easiest site to monetize is a one-hit wonder in a commercial category, with US or UK visitors and lots of search traffic. Visitors arrive in a "transactional" mood, so click-through rates are high. A sports betting odds comparison page or a casino bonus guide is a classic example: people come from search, ready to choose an operator, and leave through an ad or affiliate link.
The hardest is a sticky, general site such as a chat community, with traffic from countries where advertisers spend little. People are not in a buying mood, and even if they were, there would be little demand to monetize them.
Next step: convert CPC and CPA revenue into a CPM you can compare with the eCPM formula.
