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How do you set online advertising rates for a web site?
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2 Answers
1. Competitive Intelligence. Raid all your competitors' Media Kits and look around their sites to see depth of advertising relationships.
2. Keyword Economics. See what CPC rates are for keywords semantically-related to your topic(s). Model off of those. Google Keyword Tool is great here.
Those are a good start. It's always been my experience to go a little lower and lock in relationships instead of trying to get over on the first entity that cuts you a check.
Brian's answer is a good one, particularly the part about using Google AdWords as a proxy for rates. I would add one important tip though: that is, you should determine what type of site you have at a conceptual level.
There are three basic, conceptual options:
1. You have a low quality audience and will see RPMs (revenue per thousand rates) in the $.10 to $2 range. In this case, hopefully you have tremendous reach. I think that MySpace is a good example of this model.
2. You have an audience that is desirable from a demographic perspective and will see RPMs in the $1 to $5 range. I think this looks something like Glam Media as an example.
3. You have a smaller, more targeted audience, but advertising is endemic to your market b/c of the commercial intent associate with it. Here you will experience $10 to $40 RPMs, if not higher. You should think about Edmunds or for that matter Focus here.
Go for numbers 2 or 3. Hitting the traffic required for #1 is akin to winning the lottery.
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