What to charge initial advertisers

[Matic]

I had a lot of success today working the booths at a business expo looking for initial advertisers for my website. I recommend this kind of marketing vs. cold calling or emailing. I did it in a way where I didn't worry about protecting my idea. Hopefully some of the big wigs I talked to bite once I do a preliminary launch of the site (password protected) for them to see only.

I still have no clue on what to charge them. Please, if anyone has any idea at all, that would be helpful.

On launch it would be nice to have some advertisements on my site.

My question is:

1. What kind of discount should I give advertisers who take the initial risk?

2. How much should I charge for initial advertisers?

3. How much should I charge once traffic picks up?

The ad will be a vertical tower.

[nado]

Well usually people build a website, attract the traffic through a great service/content and then look for advertisers.

But hey if you can manage to get some paid advertisers from launch, there's instant capital.

Smallish-medium traffic sites can usually charge $200 per month. So start with an offer like that and go as low as $20 or less until they accept (as slapping Adsense up might make you <$20 for the first month)

cheers
nathan

[jaybong]

If I were you, I'd run Google Adsense at first and see how much you get per visitor, then when you've got enough traffic contact your potential advertisers and ask them for more.

Nado: would you really pay $20 to advertise on a brand new site, cause I've got a few. lol

[Matic]

If you offer a discounted price for those who take the risk of advertising on a brand new site, I think that would be worthy of an investment. Because once the site is large, those $200 a month advertising will be out of the door.

[akula]

matic, what you charge (CPM) is determined by:

- your fixed and variable costs
- how much profit you need to make
- what your competitors charge
- how much your customers are willing to pay

that's the standard formula for pricing anything

the 4th point is most important. if you haven't done your research, which you haven't (otherwise you'd know the answer), you will not be able to answer your own question

everything else is either bs, or things people say to avoid dealing with the problem

you need to find out a) who your best customers are and b) how much they're expecting to pay for your product

this is standard business planning. no tricks and no gimmicks. danny nerezov is not making this up. any small business textbook will tell you to do the same thing.

[akula]

the quality of this forum needs to improve

people are answering questions based on rules of thumb, common knowledge and wild guesses

very disappointed

"I'd run Adsense" is not an answer to "How much should I charge advertisers"

yes, you can send me hatemail, but y'all know I'm right

:-)

[TheIdeaMan]

akula, I was thinking the same thing...

matic, when you say "big wigs", how big are you talkin? You should find out how much these people are used to spending on advertising and charge that.

$200 a month seems way low for a "big wig"

-Chad

[Matic]

Big Wig as in a city radio station in los angeles

[jaybong]

Sorry Akula, I have to disagree. Isn't the best strategy for advertisng to set your rates to the highest bidder, provided of course that it doesn't irritate your users.

To do this, your right about taking into consideration what your competitors are charging, but I think the rest of your factors - variable costs, profit etc are to do with your shut down point (ie can you continue to run the site at its current level of profitability).

Finding out what your competitors charge is easy, but finding out what the advertiser is getting for what they pay on your competitors sites is difficult. Many sites will exaggerate their visitors or will try to confuse you with terms like "hits", or "advertsing exposures".

Direct advertising isn't in many cases (I would say most) the most profitable way to monatize a site, so testing programs like adsense and affiliate programs to test the water is often a good idea.


To be clear as I'm slightly confused about the question and the reply's so far, you have some sort of content site and your looking to put non google/ypn etc cpm ads on it.
I'm just trying to work out how "how much profit you need to make" and your "variable costs" etc have to to with selling ad space, they sound more like what you'd take into account by buying adspace.

Btw, I'm in my 5th year in economics and I really thought "test the water with adsense" was a valid initial reply, especially when he has limited traffic. Sorry if it wasn't up to the forum standard, if you look at some of my previous posts I have tried to help people as much as I can.