How Much Should I Charge For Banner Ads?

The million-dollar question: how much should I charge for banner ads?

There’s no magic calculator that you can plug in numbers and have it automatically tell you what your ad spaces are worth.  But, here’s some things that should factor into your ad rate calculation, as well as some things that should not.

Things That Should Affect Your Ad Rates

Overall Traffic

Larger sites can charge a higher CPM than smaller sites.  Don’t think that just because a blogger with a million pageviews monthly charges an $8 CPM means that you can if you are a fraction of the size.

Unique Visitors

Advertising agencies often want to know the number of monthly unique visitors you have.  I personally feel like this is a bit over-emphasized, as I feel like a blogger is much more influential to their visitors that come back over and over, rather than just visiting once and then leaving.

But, for banner ad campaigns, they often just want to reach a lot of people, so unique visitors are important to those types of campaigns.

Ad Availability

If you’re easily filling your banner ad spots, you can probably charge more!  This relates to why a small site can’t charge the same CPM as a much larger site: there are lots of small sites with banner ad positions available, but many advertisers want the bigger sites!

Your Audience

If you have a targeted audience, you can charge more than a site who is less targeted.  For instance, I can charge a higher CPM on my site because I have a high local following – local advertisers might pay a little more CPM than they would on a similar-sized site, but the audience they’re reaching is much more targeted.  They get fewer wasted views on people that don’t have any interest in their company!

Ad Size

You cannot charge the same CPM for a 125×125 ad as for a 300×250.  One-quarter of the space, at least one-quarter of the price. Nuf’ said?

Ad Placement

Above the fold (meaning the part of your page that most people can see without scrolling) ads are seen by more people.  You should charge less for below-the-fold ads.  The further down the ads are, the less valuable they become.

Where you place the ad in relation to other ads should affect pricing as well.  An ad placed in a block of six ads is not nearly as valuable as one that is stand-alone, or within content.

Things That Should Not Affect Your Ad Rates

Alexa Rank

Alexa Rank is easily – easily - skewed.  Sites with a techie audience who are more likely to have the Alexa toolbar installed rank much higher on Alexa because Alexa only counts people who have their toolbar installed.

Yes, I know that PR people look at your Alexa rating but because of the way they collect data, it is not at all indicative of your site’s success, traffic, influence, or anything else.

Page Rank

This might matter if you are selling text link ads, but Google advises against that, and so would I.  I would love non-requested links of any kind from a high Page Rank site, but it’s too risky to buy or sell them.

Social Media Influence

It’s awesome that you have thousands of friends, fans, and followers, but this should not affect your ad rates unless you are selling ads on those platforms that those people will see.

Email/RSS Subscribers

These numbers should only affect your ad rates if you are selling ads on those platforms.  Indicating that a banner ad on your website is a good idea because of your RSS subscriber numbers is completely irrelevant.  You’ve already counted the RSS subscribers that will see the ad in your traffic statistics.

Final Thoughts

By now you probably understand that no one can tell you what is “standard” to charge for ads – it’s too specific to your site and your advertisers.

My starting place to determine ad rates has always been to look at what I’m making with Google Adsense in the same spot.  I would charge whatever eCPM I would typically make from Adsense in that spot, and then add a bit more to account for the fact that I have to maintain it.

(FYI, Adsense pays its publishers 68% of what they charge the advertisers for the ads.)

I would encourage you to evaluate your private ad strategy and determine if you’re at a point in your blog’s life where it’s efficient to sell banner ads.  Yes, you have to start somewhere, but private ad sales take a great deal of work to have success and you may find that you’ll make more money with other advertising options that are available to you.

Carrie Isaac’s husband sells banner ads for her on Colorado Springs Bargains and Denver Bargains and is smashingly good at it, too!  Sorry, folks, he’s not available – I made him sign an exclusive contract!