Ask your question ... sign up today! It's FREE!
Advertising/PR   URGENT - Need Help Fast!  
 
This question has been closed, and points have been awarded.
Internet Advertising How Much To Charge?
Posted By: leofam on 7/18/2006 7:53 PM (CST) 1000 Points
We're launching a social networking website aimed at a particular group. We want to sell advertising sponsorships to selected non profits or other groups that will want to get their message out to our members.

Our issue is How much do we charge the sponsor? We think we offer great value by targeting the message to a specific audience that the sponsor wants to reach. More effective than a billboard or amagazine ad.

Any input on internet advertising rates or other rates paid for advertising would be helpful. Any suggested reference sources? Thank You

Posted by: NatashaChernyavskaya Accepted Answer
7/18/2006 8:45 PM (CST)
Hello, everyone and personally Leofam!

I missed all of you, getting back to you after moving to Florida... But, enough about me.

Well, technically the price of advertising at your website is relatively easy to calculate. But first let me tell you something. It absolutely does not matter how you evaluate your vebsite as an advertising platform. If you're only lauching your site, I hazard a guess that you have to promote it first just to make sure that the goup you are aimed at does really visit your website. After completing marketing surveys of your actual visitors (which you will be able to do properly after several months of actual and active life of your newly created web-project using for example daily polls) you will get a foretaste of your users profile types. Only after you conduct this research you may start offering paid advertising based on what your visitors want to read or what kind of advertising they want to accept.

I am sorry to say that, but before you even launch the project you can't offer any serious advertising. At this point all advertising you can offer without disinforming your sponsors are free kinds of ads plus, may be, some paid campaigns which will be supported by agressive promotion of your own website on the net.

I don't want to disappoint you, but you may offer $50 per 50 clicks from your site to the sponsor's one, But I assure you, untill your site starts generating thousands visits per day, it's a fantasy that you will earn your 50 bucks within even months.

Just go ahead, promote yourself, do everything to appear in the first ten search results in Yahoo and Google, get to the point of at least couple hundreds visitors per day - and then sell yourself.

And I wish you good luck with that!

PS. Don't forget about keywords and polls
 
Posted by: Papadoc (Steve)* Accepted Answer
7/18/2006 10:45 PM (CST)
I agree - you don't have much to offer at this point. Nevertheless, you can still start to line up potential advertisers if you do it right. Rank your advertisers according to how closely their target market would match yours, introduce yourself and what you are doing, and offer them charter advertising for the first few months. It's a no risk offer for them, it puts your feet to the fire to prove your concept, and it allows them to track the future potential of advertising with your website.

Of course since you don't have much, you really aren't giving anything away. Working with these advertisers offers more than a business opportunity with them, it also lets you test your ad software and gives you a basis for making claims of your click rate and all sorts of reports that you can use for future sales. There's also the "affinity advertising" value to you as well. When potential ad customers see others advertising with you, it is automatically perceived as having more value than if your site had no advertisers at all.

In the meantime, you need to work your magic to get your visitors up there, and when it comes to networking sites and BBS type sites that have the same visitors over and over again, you need an awful lot of visitors. A thousand a day of the same people day after day isn't much because click rates are very low on these kinds of sites. Visitors to these kinds of sites aren't looking for anything, they have seen what you have before and these are the reasons they seldom click. I'd say that you don't have much until you get in the 4-5 thousand per day before you have something worth marketing, but this of course depends exactly on what your market is.

How much that traffic is worth is impossible to say here and only a bit of market research will tell you this. To take this to the extremes for example, a site that caters to young urban professionals would probably be worth far more than a site that caters to stay at home moms.

Short of going into some complicated research and formulations, one of the easiest ways to determine what you should be charging is to find a similar site with similar traffic to a similar market and determine what they are charging. It doesn't have to be a perfect match, but enough to give you some sort of guidelines and justification for where you begin.

Then of course, the ultimate determiner is your market itself. If you can't sell anything, something is wrong and it could be your price. If you are at full capacity, you can probably bump things up a bit. Riding the edge however, can be a bit dangerous. If traffic falls slightly or your visitors level off and the click rate is down, you can kiss your advertisers goodbye in a heartbeat.

I prefer to keep it a bit on the low side so that advertisers continue to see it as a good value during the normal ups and downs.
 
Posted by: MANSING Accepted Answer
7/19/2006 4:46 AM (CST)
Hi Leofam,

As you going to launch Social networking website and you would like to contribute your service by sponsoring selected Non Profit/other groups, you need to be very careful about the investment. Not all Non Profit organisations are interested to use web advertisement. First of all we start with the basic theory which will give you knowledge what we can give? How can we give? How much we can charge them?

Let me tell you there are two sides to online advertising, a legitimate one and an illegitimate one. The legitimate side of online advertising includes search engine advertising, advertising networks and opt-in e-mail advertising. The illegitimate side is dominated by spamming.

Leofam, you are still gettign into new business and mostly the range of advertising options has expanded into rich media and static images. You need need to find how many customers you will get it. In any economy the price of product is depend on the demand and suppy. There are following ways you can calculate your rate:

• Industry calculations: Click Through Rate(CTR), Cost Per Action(CPA), effective Cost Per Action(eCPA), Cost Per Click(CPC), Cost Per Impression(CPI), Cost Per Mille(CPM), effective Cost Per Mille(eCPM)

• Web advertising: Web banner, Ad filtering, central ad server, pay per click, Pop-up ad, click fraud, Affiliate marketing

• E-Mail advertising: e-mail spam, opt-in e-mail advertising, Spamming

• Search Engines: Search Engine Marketing (SEM), Search Engine Optimization (SEO)

As I am not aware about the pixel size you going to offer for the advertisement. Try to contact with the advertising agency and get more information about the pricing. I have suggested some websites for the internet charges. Could you please go through this website and look for the more information.

I hope this will help!

Regards,

M Bhor

Website:

1. http://www.armenian.com/priceinternet.html
2.http://en.wikipedia.org/wiki/Category:Internet_advertising_and_promotion
3. http://www.totalcatholic.com/downloads/totalcatholic_ad_pack.pdf
4. http://www.onlinewales.co.uk/banner_ads.cfm
5. http://www.nacorp.com/NAC2/adv/online/rates.asp
 
Posted by: Sans Prix Accepted Answer
7/19/2006 5:09 AM (CST)
The beauty of cost-per-click or cost-per-action pricing models (forget CPM - that's history) is that they are value-based pricing models: the advertiser only pays if they get clicks or actions.

If you don't have the traffic, they don't pay. So where is the harm in offering advertising from Day 1?

And if you can auction your advertising, you will quickly find out what the market clearing price (per-click or per-action) is.

Jon
 
Posted by: sean* Accepted Answer
7/19/2006 7:54 AM (CST)
i agree with sans prix (fitting name - french for without price)

go ahead and start selling advertising at rates you feel your ad customer base is willing to pay on a click-through basis. talk to them and when you do let them know that the price they will be initially paying is a discount of where you expect the price will be in the future. This makes them feel good and allows you to increase your price as your site gains popularity and competition for adspace increases. Also, not-for-profits, are sometimes hard pressed for money so give them a not-for-profit 1 for 1 matching dollar discount on a cap of ad dollars they will spend for the month.

Something like this:

Hi not for profit, we will sell you an ad package on our website that will cost you $.25 per click. This is an introductory price we are offering for a 3 month period. If you sign up for 3 months at a minimum of $100/month we will also match that amount so you will get a $200/value. Remember you only pay when people click on your ad and each time it only costs you $.12. We are providing you with this opportunity because we know our target audience is interested in your organization and wanted to show you how much value our website provide your not for profit.

that is rough but bascially how i would approach it
 
Posted by: leofam Author Response
7/19/2006 8:00 AM (CST)
Some great input. Thank you to all. In our model we were hoping to price the sponsorship based on a flat price for a time period rather than clicks. We expected to take on only a limited number of sponsors (say 5-6) per time period.

We're confident that we'll get initial sign-ups in the 35,000-50,000 range with goals of a 7 figure membership over time.

These sponsors will be able to post "content" (blogs,articles,etc) to deliver their message rather than just a click ad.We will also provide reports to the sponsor on the reach of the sponsors message(how many members read the posting,age,where are they located,their interests,etc). Any further thoughts on what to charge the sponsors? Any more insight on the "auction"comment?Thanks again for the input.
 
Posted by: darcy.moen Member Response
7/19/2006 8:18 AM (CST)
I trust that you'll be able to back up your confidence with server stats. You'll need all kinds of stats to show potential advertisers what your site is doing. Half the sell in this case is going to be performance of your web site. It will have to generate hundreds of thousands of hits to offer any real value to advertisers.

Darcy Moen
Customer Loyalty Network
 
Posted by: Dwell13 Accepted Answer
7/19/2006 9:23 AM (CST)
I work in the mutual fund industry, where there are a lot of sites that offer the "flat fee" sponsorship model --and I think that the pricing strategy they use is largely dependent on what they think their target firm's marketing budget is! I have been amazed at how many want so much money for so little. The sites we have done sponsorships with presented us with great added value opportunities, great brand exposure, as well as a decent price.
For the MF industry - what I would term as a "decent sponsorship price" falls between 6-12K for a year's sponsorship. But I am in the land of outrageous marketing budgets. You need to get a feel for what your target firm's have to spend - and then, because you are a new venture, offer special pricing - either a little lower than what you eventually want to charge, or offer 18 months sponsorship for the price of a year's sponsorship, etc. Make sure they know they are getting a "special" deal since you are just starting out.
And good luck!

Deb
 
Posted by: Deremiah *CPE Accepted Answer
7/19/2006 10:21 AM (CST)
Hi leofam,

there are many ways to slice this. One is the level of your exposure in volume as Darcy has suggested but one equally as important is the quality of your viewing audience. If you have a viewing audience that consist of heavy hitters in the industry that would bring much more value than even hits. Smaller number than larger number volume but having real movers and shakers makes equally an appealing interest to those buying advertising space. It's the funnel approach versus the concentrated approach...shotgun (buckshot) approach versus the 357 Magnum (narrower) approach.

In any case this will also determine what you will charge for advertisement. Newspapers get broader (buckshot) opportunities but it's less expensive advertising than a trade magazine that get's narrower more pinpointed specific viewers. You have to weigh all of this and even consider the medium at the same time. Do you know much about your viewers who visit your website? Knowing more about them will also determine the value of your advertising dollars. Their is much to think about in this simple question and so many things to consider. Please research this out more to identify how others do it. Remember our only real problem in life is our failure to be "MORE Creative" than we’ve ever been. If you “Invent” your opportunity YOU WILL most definitely create your future. Just know that I'm here for you if you need my help. Is there anything else I can do for you?

Your Servant, Deremiah, *CPE (Customer Passion Evangelist)
 
Posted by: Papadoc (Steve)* Accepted Answer
7/19/2006 10:23 AM (CST)
The idea of an auction is completely without merit. I buy advertising all the time and if someone called me and suggested that I bid on advertising on his site, the next thing he'd hear is the dial tone. The opportunities to place advertising are endless and playing games just isn't worth the bother. This would go double with a site that has no traffic yet. There's nothing to auction here except expectations, and those are about as cheap as air. If I were one of your prospects and you told me that you expected X number of people per month, I’d say, “Great! Come back and talk when you have them.” It’s a cruel world out there in ad-based website publishing.

Unless you personally have a very recognized and successful history of launching ad-based websites, it’s generally recognized that new space isn't worth anything before you launch. When you do launch, people will want to test-drive your site before they commit further.

However, when you are in a position to charge, I agree that flat-rate (based on performance statistics that you can show) is probably most applicable to start. There are plenty of ways for them to track effectiveness of flat-rate advertising from their end if they are inclined to do so.

CPA (cost per action) – As an advertiser, the first thing I would want to know is what kind of software you are going to provide to track this because most advertisers do not maintain their own CPA software; they use ad brokers that do have the software. CPA is archaic and largely only used by large advertisers against small publishers that have absolutely nothing else to put on their site. The thing is that the small publisher just doesn't know any better.

CPC (cost per click) – Bring this one to me and my first question is, which third party are you using to monitor click-fraud? Click fraud is rampant and unless you have a way to guarantee your customers that clicks from your site are legit, they won’t be interested in further discussion. Google, Yahoo, and MSN employ this model very successfully, but advertisers are even worried about click fraud with them. A small publisher doing it isn’t a real-world idea.

CPM (cost per thousand) – Most certainly NOT dead. That's a popular myth among publishers that are too small for anyone to deal with on a CPM basis. It’s the leading form of advertising and DoubleClick alone does 30 billion + CPM banners per month and it's the largest model used by medium to large publishers. Actually, it’s considered the most honest form of advertising out there because it’s just not worth it to fake impressions, there’s no advantage to the publisher to fake clicks, and it doesn’t require extensive tracking software that tracks the customer through the action.

It also places the proper amount of burden for success on the quality of the banner provided by the advertiser. As an advertiser, I have to pay for every impression, so I want my ad to attract the most clicks and sales, not just brand my company. That said, CPM requires that the publisher be big enough to bother with. At a $3 CPM (reasonable for a startup), 10K visitors with an average of 3 impressions each is only $90. Not really worth bothering with from an advertiser’s perspective. Split this amongst 4-5 advertisers and it REALLY isn’t worth the bother. CPM is a very viable model and used all the time. However, probably not worth working with until you can offer 750K or more impressions per month.
 
Posted by: Rob Member Response
7/19/2006 6:34 PM (CST)
FIRST, VISITORS:
I don't understand who will go to your site? Who will become a member? Who will want to become a member?
SECOND Advertisers:
Non profit groups are mostly around to launder money (not all the time). Then there are the religious non profit groups, they have an agenda at the end of the day, most times? What is the demographic of your target audience, because I am completely confused on what type of viewers will be coming to your site?

If I am a fundamental Christian and constant visitor to your site, and a non profit gay and lesbian group pop up, I might become mad and stop supporting your site. (Example)

*I am not fundamental, and gays and lesbians are cool, except Rosie:)
Sorry if I am totally off topic.
Roberto
 
Posted by: subhrajit.kar Member Response
7/20/2006 1:14 AM (CST)
Why don't you treat it as a marketing interface. Create a payment gateway and charge a certain percentage. For e.g. every $100 earned could get you $5 to $10. This way the NGO might see value and not question the efficacy of the medium.
 
Posted by: Greenman Accepted Answer
7/20/2006 4:09 PM (CST)
I'm on board with Papadoc. I sell advertising and when a potential client starts talking about CPA or CPC, I know it's going nowhere.

I work for a newsletter and don't currently sell website ads, but we employ two advertising modalities: 3rd party dedicated e-mail blasts; and newsletter ads. Our pricing models vary as well: for e-mail blasts, we charge CPM on a sliding scale - small and large drops are equally expensive in man hours to set up, so the small drops carry a higher CPM; for newsletter ads we charge a flat fee based on position. Of course, long schedules and large purchases garner substantial discounts.

For website ads, CPM seems most fair, but you can't really sell ads until you achieve 1MM or so fully loaded page views, otherwise you risk under-delivery which must be avoided in any publishing medium.
 


Get more answers ... ReTweet this!

Would you like to post a response?
Welcome to Know-How Exchange!
This is a collaborative community. We welcome everyone's participation.
All you need to do is login. Enter your account info in the box above (top right).
Not a member? Not a problem. Register here (it's FREE and EASY).




Know-How Exchange powered by MarketingProfs


Sponsored Links

Buy a Link Now

Just Released ... Download Today!
Just Released ... Download Today!
Look inside
User Name:
Password:
Remember Me
Forgot your password?

Top 25 KHE Experts
(Advertising/PR)
Jay Hamilton-Roth (48187)
W.M.M.A. (32488)
mgoodman (28357)
CarolBlaha (21401)
michael (19117)
PhilGrisolia=Results (13461)
Gary Bloomer (12060)
thinkmor (11658)
darcy.moen (10787)
stevea (10362)
Peter (henna gaijin) (10341)
NuCoPro (9474)
mbarber (8803)
telemoxie (8723)
Mushfique Manzoor (7932)
Puru Gupta (6790)
SteveByrneBranding (6690)
SRyan ;] (5966)
shghosh (5797)
Deremiah *CPE (5479)
Pepper Blue (5368)
ASVP/ChrisB (5291)
Tracey (5120)
Mikee (4878)
amandavega (4775)
Recently Posted Marketing Jobs
Senior Marketing Associate
Demand Generation Sr. Manager
Web Consultant
Director of Marketing & Community
Content Acquisition Manager
Marketing Manager
Senior Marketing Executive - ICIS Americas
Vice President, Marketing
[more jobs]

Join over 357,000 members ... SIGN UP!

My email address is and I'd like my password to be .

Already a member? Sign In!

My email address is , and my password is .


HACKER SAFE certified sites prevent over 99.9% of hacker crime.