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Where to start with banner ads?

I have a customer, but don't know what to charge.

3:42 am on Jul 6, 2005 (gmt 0)

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I'm sure this topic has been beaten to death on this forum, but the search function has been down.

I have a site that deals with a very specific niche. There are roughly 1500 pages on the site that deal with different brands and models of widgets.

Back in December, one manufacturer of such widgets suggested that we experiment with a small banner ad for his company on the home page of my site. Fine with me, but my home page only draws about 8,000 page views a month out of a total of roughly 450,000 page views per month for the site as a whole.

He's getting maybe 80 click-through's per month, or 1%. Not bad, from what I've gleaned here, but not good, either. In terms of page views, his brand is near the bottom. If he were the #1 manufacturer on my site, that number would be 10X, or more.

This is a very specific niche. I suggested to him that he allow me to put his banner ads on every one of the roughly two dozen Acme Widget pages I have that feature his product.

I'm awaiting his response to my suggestion. I also told him that I'd be willing to use his product pages as a test. If I can get him a decent CTR, there's many other manufacturers on my site that I think I could convince to run ads.

Problem is, I have no idea what to charge. On top of that, he's not accustomed to paying by the click. He buys his ads on a monthly rate. But he judges the price he pays based on click-through's. IOW, he wants a fixed price, but still relies on CTR for pricing.

If I can get this guy to start paying, other manufacturers will follow. I just have to establish a track record.

For reference, here's what another site charges for banner ads (although there may be a special deal for those companies who buy both print and website banner ads):

$200 per insert for one month.

Average hits per day: 25,362

Average page impressions per day: 1513

Average user sessions per day: 1157

I'm doing over three times the number of visitors per day that the other site delivers, and nearly ten times the number of page impressions. The problem is, I have about 1,500 pages on my site, divided by probably twenty or more manufacturers. So, he'd only be getting the click-through's from his individual widget pages.

For a very specific niche, what would be considered a reasonable CPC? Or, if translated to a monthly fee, what might seem fair?

I hope these questions don't violate the TOS.

10:45 pm on July 6, 2005 (gmt 0)

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6:06 pm on July 8, 2005 (gmt 0)

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charge a CPM for your banner. the other site is charging roughly an 8 cpm 200/25=8. that is a bit high imo -- i am use to seeing banner comped half the time because of their poor performance in email buys but thats neither here nor there.

Quit worrying about all the other impressions on you get on your site with this client. Either sell the other space or throw on commjunc or adsen or something until you can actually sell the product.

9:36 pm on July 9, 2005 (gmt 0)

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Thanks for the reply, ugamis1.

His CPM isn't 8. He's getting 25,000 _hits_ a day, not visitors. With 1513 average page impressions per day, that's 1513 x 30= 45. 200/45= 4.44. That seems a little more reasonable.

Since my advertiser only has 18 pages for advertising on my site, I'm really at a loss as to what to charge.

Again, any suggestions are much appreciated.

4:29 am on July 10, 2005 (gmt 0)

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You might take a look at CPC prices on Google & Overture, estimate he number of clicks and throw a premium on top of it for "branding". If this is a B2B kind of thing, the traffic can be extremely valuable and hard to come buy, cause there may not be much search volume.

Also, if it is a large comany it will cost them more than $200.00 a month to process the paperwork.

If you think there is potential for similar companies to want to jump on board once they see this company advertising, then it might be worth going low on this one and upping the prices when competitors want to start advertising.