What to charge for email advertising?

[Bluestreak]

Hi all,

I was thinking of creating a newsletter service for my website members, which would highlight some of the latest news and information regarding a motely of topics. Members would have the option of choosing text email or HTML email, and the newsletter would be sent once or twice a week.

In order to offset impending bandwidth costs, I would offer banner advertising at the top of HTML emails, and text advertising for the ASCII based emails.

My question is, what pricing model do people use for something like this? I estimate I'll have about 1000 subscribers to start. Is my advertising base too small that advertisers will point and laugh at me? :-) Im concerned I will incur considerable bandwidth fees that I'll have to pay out of pocket before advertisers start taking notice. I do have a specific audience so I could offer some kind of targeted demographic.

The upside is that Im not looking for profit but to break even, so the service basically runs itself.

Any help appreciated!

[Drastic]

It really depends on the topic of your newsletter. Ad spots in a IT professional ezine are going to run more than say, a joke ezine. Try looking for other comparable ezines and see what they charge for a rough idea.

A couple good points made here by eljefe3:
[webmasterworld.com...]

[Orion]

Our experience has been that email advertising has been a flop, and we've never identified if it was just us, or that there was little prospect for a publisher to make money.

We had an external agency sell for us, and found that they can either a) sell a very limited portion of the list (because buyers want very specific demos) or b) sell a "free" test or c) sell just cpc basis (we did get a few cpm deals).

We found we could never get the advertising to cover the cost of sending (until we brought the sending in house). But if you can't make $1 CPM on your sends, is it really worth an increase in unsubscribes that often comes with increased advertising?

I was at the DMA in Chicago last year, and heard that 5% monthly unsubscribe was normal (or that a customer email address has an average life of 6 months). I think users are generally sick of email spam, and since users are on so many databases and there is no "central policing authority with any power", there is an incentive for certain email senders to send an extra email to a client at a cost to every other online marketer who also has the same email address.

I'd be interested in hearing other experiences?

[Bluestreak]

Thanks for the advice all.

From what I understand email advertising can be very effective if done tastefully and with good model. I know one person has a 100,000 member base and charges 250 dollars per ad, which is pretty dirt cheap (about 25 cents CPM) but still provides the basis for a doable model.

I guess a lot of factors have to be considered when trying to tap into this potential source of revenue