Advertising

I've been approached by a company interested in paid advertising on my directory, (see sig). I'd planned on offering advertising in the future anyway, once I got the site good serps and PR, but I'm not sure what's the best way to go about it as I've never done anything like this before. Should I offer a basic fee per month or pay per click or what? I could use a few pointers.

Unless you have lots of directory traffic, you won't get much for pay per click (no traffic, no clicks). I would do the per month option instead.

Yep, do it monthly - it will save you from counting clicks and documenting them - save yourself the work.

Offer them a yearly fee at discount.. then you only worry about it once per year.

Sounds good, that's what i'll do. Thanks.

Most advertisers wont go for that. Get yourself a nice free tracking script at hotscripts.com and sell CPM (cost per thousand)

If the banner is ROS (Run of Site aka on every page) than depending on your traffic $5 to $15 is acceptable (not if they are adult though)

So lets say you give them 35,000 pageviews (not hits) in one month than it would break down like this:

35,000 pageviews divided by 1000 (CPM) multilpied by $5 (example) = $175 per month

Now an average click through rate(CTR) for a banner ranges from .3% to .6% with .45% being average. You have to make sure you give an advertiser a decent CTR because it will

1. Make them keep advertising
2. They wont feel ripped off
3. Word of mouth is great advertising for you

So .45% of 35,000 pageviews is 158 clicks on the banner. $175.00 divided by 158 clicks comes out to $1.10 per click. In banner advertising that isn't bad at all if it's targeted. If not than thats a bit much. An average cost of $.40 to $.75 for untargeted works.

But it all depends on the amount of pageviews you'll be serving, the website you'll be advertising and the amount a client feels comfortable with spending. Yearly nahhhh unless they have no idea what they are doing ;)

Hope that helps

um...I have to admit to being more than a little confused here.

CPM, CTR, ROS...think I need a break before I even start.

I'll take another look at it in the morning.
Thanks.

CPM is Cost per Thousand impressions which basically means their ad loads 1000 times. If the ad runs on every page of the site (ROS = Run Of Site) than 1000 pageviews equals one CPM.

CTR is Click Thru Rate. Meaning if 1 out of 100 people click on ad than that would be a 1% CTR (which is great!)

A client pays you $5 to run their ad 1000 times and they should get about 10 clicks paying .50 per click. Thats only with a 1% CTR - .45% is average which comes out to 4.5 clicks at $1.10 a click.

Just make sure you dont over charge

If you have any questions just ask away.

I don't agree on the most advertisers thing. Most advertisers that would want a CPM or PPC ad would go to an advertising agency in my humble opinion. I think most smaller sites sell ads by the month. I would not set up a CPM or PPC unless they specifically asked for it. I would make my offer for the month and see what they say first.

I would sell a banner or link by the month too.

What about offering both, keep everyone happy. Either buy advertising by the month, with discount for 6 months or a year, or the pay per click option.

At the moment though there really isn't enough traffic coming through. I'll have to do a bit more work on that before I go into the advertising in a big way, but maybe in the mean time offer ads by the month.

PK, I was half asleep when I read your post last night so didn't really take it in, but I think I got it now. Thanks. Saying that, I'll probably be back in a few weeks asking what's CPM

I'd work on your traffic because CPM isn't profitable until you can serve up acouple million ads a month. I'd suggest doing a monthly or quarterly pay scale for now.