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Part 3: Playing The Rate Card

September 8th, 2010

y2.d122 | so. wiped.

photo credit: B Rosen "This is you after designing ads for 120 hours straight. Was it worth the 10 bucks a pop?"

By Matt Cook
Point Click Media

After you’ve acknowledged which parts of your website have the most potential for advertising revenue, and after you’ve decided exactly what types of advertising you’ll be offering, you’ll need to decide on a value for each of those spaces and assign pricing for it.

This is likely to be the most difficult part of getting into online advertising – generating the revenue model. For one, you’ll need to study your metrics, demographics and statistics to find out which pages are the most visited. For example, your homepage will likely be your most visited page, and why not? The home page is the entry point to your website. It’s likely how your visitors find you through search engines or through referrals and it’s also where they go to find out what’s happening throughout your site. Naturally, the more traffic to the page, the higher the value – and with that you can associate a higher price.

You’ll also have to keep in mind things like production costs. Will your advertisers be supplying their own content? Remember that not every business has a team of designers ready to provide you with an awesome barrage of advertising. You may need to develop some concepts for your clients and have some back-and-forth with them to ensure their satisfaction.

When factoring in production costs, it’s not uncommon to see many websites budget the first week or month (depending on how the ads are sold) of a sale toward the initial production. Once those initial costs are covered, be it for the design work or perhaps a commission to whomever sold the space – then you can begin to turn a profit. This all goes along with ensuring that your website has a proper business model in place before you start lighting up your site with ads like a Christmas tree and lose your shirt by not covering costs.

Web advertising can also be sold in a slew of different methods. One is by dedicated time slot where the ad is sold by a number of days, weeks, months, etc. This is the most common and traditional way of selling advertising. Other methods include selling per impression or per click. This works by charging the client for a predetermined number of page views or by charging based on the number of times someone has clicked on the clients’ ad(s). Just as you can begin to get creative with what types of advertising you will be offering, you can be just as creative with how you sell it.

A proper business model is the key to making sure that your website blossoms into a healthy revenue stream. To do it properly, it’s not as simple as filling your white space with ad spots and plastering “Buy Me Now!” tags all over the place like a used car lot. There’s loads of strategic and careful planning to be done to ensure long time stability and viability.

We’ve touched here on the basics of preparing your website for advertising. If you’d like help in studying your website with the goal of helping it pull its own weight in revenue, contact Point Click Media.

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Posted in General News, Web Tools on September 8th, 2010

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