Question

Topic: Advertising/PR

Rationalize Sponsor Ad Pricing On Complex Site

Posted by modza on 1/21/2011 at 12:02 PM ET 500 Points
Site is new business and regionally-focused social network (see beta: https://www.foorumnm.com). Membership, which is free, allows you to identify yourself by region (city) within target state (New Mexico), by role, occupation, industry, Content consists of news, posts by members and events.

You shouldn't supply real numbers, just stand-ins (x, y, etc.) -- or if it's easier to use numbers, make clear that they're for illustrative purposes only.

I'm a strong believer that pricing should be simple enough to allow the prospect to focus on what they're buying rather than on trying to figure out the best deal, and thereby focusing on price rather than benefit.

We also want to limit sponsorship advertising positions to four per page, ideally, and we're selling annual sponsorships.

The original idea was to seek sponsors for, say, the accounting page in Santa Fe, or the overall Santa Fe page, or the energy industry page. But the site architecture does not create such pages. Instead, each category is independent: there is a Santa Fe page, an Accountant page, an Energy industry page, etc.

Also, in NM, Albuquerque is 7x the size of the next three cities; after those, every other town is 1/2 or less. So it would seem to make sense to charge more for ABQ, less for the next three, and less still for all the rest. But along with the population, the audience for each declines. We also don't know (yet) how many members are in Energy vs. Aerospace, etc., nor how many accountants we'll have vs. software developers, say. One possibility is to change the advertising structure so that ads follow members based on how they've categorized themselves. But right now, they can choose more than one item from the categories, so that complicates the personalized advertising structure. We could just price by X amount per thousand members, regardless of location or industry -- but as a startup we have no real idea of how many we'll have. (Of course, that is an objection that every advertiser on a new site can raise.) Any advice?
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RESPONSES

  • Posted by Jay Hamilton-Roth on 1/21/2011 at 4:43 PM Member
    How about letting the sponsors bid for their spot, in the same way that people bid for PPC ads? Initially, the value of the ad is zero (it's not a proven network), but as people gain benefit, it's worth more to them.
  • Posted by modza on 1/21/2011 at 5:19 PM Author
    Great thought -- but we're bootstrapping ourselves. The first sponsor bought sitewide for enough to keep us going for three or four months, and I couldn't face the first sponsor when he finds out other people aren't paying anywhere close. Also, the pool of potential advertisers is relatively small -- probably the largest law firms, accounting firms and other companies with an institutional interest in supporting small and entrepreneurial business. So open-auction-style doesn't fit well. Could be a closed auction, though, that's a thought. Thanks for challenging me!
  • Posted by modza on 1/26/2011 at 12:13 AM Author
    Well, I'm sorry not to have heard more ideas. What I finally did was take the highest amount paid, which is what the first sponsor paid, realizing that that's equivalent to the entire population (actually employed population, more important than census totoal); then cascade the prices down from there, proportionally. I do end up with variations of price, but they're proportional to the market sizes. The same is true for the industries: everyone employed in every industry is the top price-- and employment statistics from the Bureau of Labor help me break those down. Anyway, I like this forum, and won't hesitate to ask another question another time.
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