How much to charge for Ad placement (CPM, CPC, CPA and CTR)

I’ve been thinking about how much I should charge for online banner ads placement on a few of my personal websites. Here are a few nuggets of information I found while search for guidance.

CPM rate chart for page impressions on a 125×125 Banner
For Every 1,000,000 = $1500 = CPM of $1,5
For Every 500,000 = $750.00
For Every 250,000 = $375.00
For Every 125,000 = $187.50
For Every 62,500 = $93.75
For Every 31,250 = $46.87
For Every 15,625 = $23.43
For Every 7,812 = $11.71
For Every 3,906 = $5.85

NOTE: So placing a 300×250 banner on the sidebar for instance, is similar to having 4 125×125 ads, so you could charge 4 times the price of the 125×125.
In other words if you had a CPM at 15,625 impressions ($23.43 x 4) would equal $93.72. A CPM of $1,5.

Similarly, increase the CPM if the ad is on the header or blended with the content, and decrease it if the ad will be displayed below the fold or on the footer.

CPM
CPM means Cost Per Thousand. (M is the Roman numeral for thousand – and so Cost Per Thousand).

CPC
CPC means Cost Per Click. This is how much you would pay the ad-network or website every time a visitor clicks on your banner.

CPA
CPA means Cost Per Action. This includes (CPR – Cost Per Registration) , or if the visitor makes a purchase (CPS – Cost Per sale). It could be a flat fee or a commission percentage.

CTR
CTR is Click Through Rate. This is how we calculate CTR:
(Number of Clicks / Number of impressions) x 100
So if I had 2,000 clicks from 100,000 impressions, this would equal 2%
(2000 / 100,000) x 100 = .02

Data references on publisher ad rates an banner advertisement terminology:
http://www.problogger.net/archives/2008/03/27/how-much-should-i-charge-for-my-advertising-space/
http://www.successonline.in/what-is-cpm-cpc-cpa-and-ctr

1 Response

  1. tony says:

    Im going to do a monthly fee until i can boost high visitors.

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