A Good Price for Online Ads

What are good average numbers?

[ChrisXenon]

Hi,

I'm interested in the going rates for online advertising.

I feel I've been stung. I purchased a 3 month ad run for our e-commerce site on another site, for £300.

Their ad sales lady "virtually guaranteed" that we'd do well, but when the dust had settled we got about 3 clicks per day, mapping into about 3 sales over the ad run.

It turned out they get 77 visitors per day, mapping into 12,000 page views (about 5 views per visit) per month in the area I'm advertising in.

Basic maths says:

12,000 page views => 2% click through => 240 visits => 1% conversion ratio => 2.4 sales per month.

I.E. 7.5 sales would cost me £300 = £40 per sale!

ACTUAL figures lead to £100 per sale.

They are saying that 12,000 page views for £100 is 8.3p CPM which is reasonable. They offered to extent the ad run to 6 months, lowering it to a CPM of 4p. They point out that my conversion ratios and ad click-through rates are legitimately not their concern - and I agree with them entirely on that.

But if the Industry Standard clickthrough and conversion rates are those I indicated (2% and 1% respectively) then how can anyone make money with advertising like this?

So, my questions are these:

1. What is an average click-through rate to be expected from an ad?

2. What is an average conversion ration (maybe this is a dumb question)? In case it's relevant, our website is an online adult shop - average sale being about £27.

3. What is an average CPM in the industry?

4. If my numbers (2%, 1%) are about right, why would anyone ever buy ads like this? Since they do - I assume I've got something very wrong somewhere in here.

I welcome answers to these, and any other comments which might be helpful.

Thanks,
Chris

[olias]

> They are saying that 12,000 page views for £100 is 8.3p CPM which is reasonable.

Well yes, 8.3p CPM is very reasonable but surely you are paying £8.30 CPM.

[chiyo]

Well page views are different from CPM. The M bit of CPM means thousand *impressions*. What with search engine spiders, and heaps of other spiders, plus people browing with functionality off that may be necessary to view the ad (images off, etc), impressions are always mush lower than page views.

8p is very reasonable IF it was impressions rather than page views. Generally 20c USD CPM is on the low side. Generally the more targeted the site, the higher the CPM. If a site is right in your very targeted niche area even $1 CPM or more is worthwhile. but if its a generalist site where very few would be interested in your product 20c CPM is far too high.

Anyway, thats my take. Feel free to disagree.

[rcjordan]

Depending on the length of run, placement, etc., I'm charging $5-$8^{us CPM for targeted text ads (bordered text block, similar to adwords in appearance).}

[EliteWeb]

I believe it depends on the site and what type of 'authority' your site is in the field you deal with, those who are niche and reign superiority can charge higher.

For one of my sites I charge a flat out fee 300.00 a month which advertises on two sites. I don't care how many clickthroughs they get - their name brand is being seen by all the page views. Advertising with me brings in a higher purpose, that is that they would hope i recommend the product in other work i do, (reviews, books, magazines etc)

I've found that companies that have affiliate programs do not want to pay the fee, they want me to stick their graphic on my site and tell me that 'YOU'LL Make Money!!' Implying that if my site is really getting the traffic I'll make money.

I'm not here to play games with people :) For those who want advertisement they will pay. As far as the per click model, i enjoy per month more ;) Then again I do keep my advertisement closely targetted to the site itself so it does get many clickthroughs.