There is no single calculation that will tell you the exact right price to charge advertisers that want to place ads on your blog. However, there are some rules of thumb and baseline calculations that you can use to get started. The real science of calculating the right online advertising rates comes through experimentation.
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How Much Should You Charge for Online Advertising on Your Blog?[/caption]The truth is there are a lot of factors that affect the amount you should charge for online advertising on your blog. The type of ad (image, video, text, and so on) can affect the price as well as placement and the payment structure (for example, pay-per-click vs. pay-per-impression vs. flat rate). For example, ads placed above the fold should cost more than ads below the fold, but the challenge is finding the right price to maximize earnings. In other words, what is the right price to charge for each type of ad you'll publish on your blog and in each possible location where those ads can be displayed to visitors?
Blog Advertising Rate Calculation
The sweet spot for your ad pricing is the price that keeps ad space filled without undervaluing that space. A popular method for calculating blog advertising rates is to divide the number of daily visitors to your blog that could see the ad by ten. Your calculation would look like this:
Number of Daily Visitors Who Could See the Ad ÷ 10 = Flat 30-Day Advertising Rate for that Ad Space
It's important to understand that the value of your audience could affect ad pricing, too. For example, a blog with a highly targeted and desirable niche audience that advertisers want to connect with could demand a premium advertising rate from those advertisers. Furthermore, your audience's propensity to click on ads can also affect advertising rates. For example, if your audience tends not to click on ads, you need to factor that into your pricing model.
Don't Undervalue or Overvalue Your Blog
It's important to price advertising space on your blog as close to that aforementioned sweet spot as possible. However, until you identify what that sweet spot is, it can be easy to fall into the trap of undervaluing or overvaluing your blog.
Undervaluing your blog advertising space might keep that space filled and guarantee that you'll continue to earn money from that space, but it also means you won't make as much as you realistically could earn from that space. Furthermore, undervaluing your ad space creates a perception in advertisers' minds that your blog is worth less than it really is. You want advertisers to perceive your blog as offering a good value for the money without seeming cheap.
Overvaluing your blog advertising space could keep you from selling all of your ad space each month. Furthermore, it might create perceptions in advertisers' minds that their ads will be seen frequently and your audience is very receptive to ads. If the results of the ad campaigns they pay for on your blog don't meet their expectations, they won't advertise on your blog again. That means lost future revenue for you.
Setting Ad Space Prices Based on Competitive Blog Rates
Another important step in calculating advertising rates for your blog is to analyze what your competitors are doing. Find other blogs with similar audiences and traffic levels as yours and check out their advertising rate sheets. Visit an online advertising provider website like BuySellAds.com where you can quickly research advertising rates on a variety of blogs. Use all of this information to determine the best rates to charge for online advertising on your blog, and be prepared to adjust those rates as you test different ad formats, placements, and so on.
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