What is Web Advertising?

Many of our clients are using space on their websites for sponsorship ads in order to help offset website costs and increase revenue. This works particularly well for associations and non-profits who see the value in partnering with sponsors.

One question I get a lot is, "how much do I charge for ad space?" The short answer is, "whatever you want." However, there are a few guidelines that may help.

First off, the value of sponsorship space is based on traffic, just like TV commercials. It costs a lot more to run a commercial during the Super Bowl than it does to run one during an afternoon soap opera. The same principle applies to your website. If you are not getting much traffic yet, them you will not be able to charge much for the ad space. However, if you can demonstrate that you get lots of traffic to your website on a regular basis, you can charge more. Google Analytics will help you with this.

Next, you will want to decide if you want to charge per impression, per month, or per click. Per impression means that the advertising fee is based on how many times the ad is displayed, whether someone clicks on it or not. Per month is pretty simple: a monthly fee is charged and the ad runs in the rotation all month. Per click is a model in which blocks of clicks are sold, which means that a fee is only charged based on how many times the ad is clicked on and the visitor is taken to the sponsor's website.

The Pay Per Click model is the same model that Google uses in it's advertising campaigns (called AdWords). It tends to be the most fair because the sponsor is only paying for direct leads.

I've seen varying pricing for all three models. Some websites will charge $1 per click to keep it simple at first, and then as demand increases that fee will go up. Others charge anywhere from $50/month to $200/month based on website traffic. Hundreds of visitors per day might put you at the lower end of the spectrum while thousands of visitors per day would put you at the higher end.

The bottom line is, don't be afraid to experiment and monitor demand. Try starting out with $1 per click and sell in blocks of 100. Then, as you get more sponsors, gradually raise the rate until you find a good balance point.