Why I Use Private Advertising & How I Determine Prices

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Selling your own advertising space can offer you more revenue but it’s definitely not easy. The main reason why contextual ad networks like Google Adsense are so successful is because they do all of the dirty work for you. They find advertisers, determine pricing, and collect payment. As a publisher, all you need to do is enter in your bank information and put some Javascript code on your site and the cash will start to flow in. However, if you want a bigger piece of the action and more control over which advertisers you’d like to feature on your site, it may be a good idea to free yourself from Google and sell your ad space on your own.

A note of caution is that selling ad space is very time intensive and involving. It’s not just a “set and sit” strategy where you place a piece of code on your site. You must actively sell your site and relay the benefits that potential advertisers will receive. However, the rewards can be great. Depending on your industry and the size of your audience, selling private ads can give a big boost to your online income.

As you might have noticed, I sell private advertising slots here on Winning the Web. At this point I think this is the best method of monetization for the blog for the following reasons:

• Established readership
  The blog was started only 3 months ago but brings in around 10,000 visitors per month. Since the site is established and has a decent readership, it’s definitely ready to be monetized through private advertising. Don’t resort to private ads until you’ve done a bit of marketing for your site and have at least a small audience.
• Internet marketing niche has a horrible CTR
  As you can imagine, any site related to Internet marketing or making money online has a horrible click through rate. Webmasters just don’t like to click on ads so programs like Google Adsense don’t bring in much income. Selling ads independently is a great solution to combat this trend.
• Developing relationships
  Selling private advertising is also a useful method to make friends within the industry. When someone buys an ad spot, I usually follow up with them and initiate a business relationship.

So now that you know why I use private advertising extensively on this blog, I’ll go ahead and explain how I do it. If you take a look at my Advertise page, you’ll see all of the different options that I offer, priced according to the level of exposure that they provide the advertiser. There are a variety of methods that can be used to determine the pricing of a private ad. I’ve listed some below.

• Other sites in the niche
  How much are other bloggers in your industry charging for private ads on their sites? Take note of the overall trend and use it as a baseline to construct your own price.
• Double your network earnings
  Since Google and other ad networks take roughly half of the revenue you generate, you can charge double what you make and advertisers would still pay the same price.
• Multiply your monthly visitors by .003 to get average monthly price
  This is an extremely rough estimation and will vary by niche, but multiplying your monthly visitors by .003 might get you a decent baseline for your average monthly price. In December, WTW generated about 8,000 visits. According to this model, ad prices would be $24 per month, which is a good reflection of current prices.
• Estimate using cost per click
  Using an analytics package, you can gauge the number of clicks an ad spot generates in a month on average. Then you can set a cost per click and determine monthly prices. So for example if I saw that an ad position received an average of 100 clicks per month and wanted to charge 25 cents per click, I could set a baseline price of $25 per month.

There’s no right or wrong way to determine prices for private advertising. It all comes down to the value advertisers receive and whether or not they get a positive return on their investment from your site. What do you do to set your private advertising prices?