Estimating Online Banner Advertisement Costs - dummies

Estimating Online Banner Advertisement Costs

By Jan Zimmerman

Unlike using pay per click ads, charges for most banner ads are either cost per thousand (CPM) impressions or a flat rate per month, quarter, or year. The more targeted the audience, the more you pay. Decide how much of your overall marketing budget to dedicate to paid banner advertising. Drive your spending from your budget, not from costs.

Most sites that accept advertising publish media kits online. The kit should include demographics, page views, banner size specifications, and rates. If you can’t find the kit on the site, look for an Advertising link to locate contact information for a sales representative.

A broadly targeted, consumer audience might run less than one dollar per thousand impressions. A prequalified, narrowly targeted market, such as vice presidents of financial corporations, can have a CPM of $70 to $100 or more. Portal sites, which have a low CPM, generally have quite a high minimum CPM.

Banners on highly trafficked sites — such as major news outlets, entertainment and sports sites, and other portals — generally have minimum CPM prices that are too expensive for small businesses.

Various factors affect the rate that’s charged for an ad campaign:

  • Ad size and type: A Flash ad that has only a few images can generally run for the same price as a static banner.

  • Location of an ad on the page: An ad above the fold performs better because it’s seen more often.

  • Number of ads sharing the same space in rotation: The more ads that share a space, the less often yours is viewed.

  • Pages of the site on which the ad runs: An ad that appears on every page is a run-of-site (ROS) ad.

  • The nature of the site: An ad tends to fare better on content sites than on portals.

  • Contract length: The ad contract specifies how long the ad runs.

Life is negotiable! A site that has just recently opened its ad program, or is trying to fill empty slots, might cut a deal with you. Watch for a house ad (an ad for the publisher itself) as a sign of unsold inventory. Sometimes, you can persuade a publisher to run an ad for several weeks as a free trial. Ask! What’s to lose?