Help! How Much Should I Charge For Advertising?

by derek on September 10, 2008 · 39 comments

The following scenario is one that many bloggers have experienced…
You’ve registered your domain, installed WordPress, and you’re writing great content. The number of visitors continues to climb and you’re thinking about how nice it would be to have people advertising on your site.
Then it happens!
You receive an email from someone that is interested in advertising on your blog. Your heart starts to race with excitement, your palms may even be a little sweaty. Then you realize that you have absolutely no idea how much you should charge for advertising!
As you ponder the question, you begin to worry that you don’t want to charge too much as then the advertiser might decline and head for the hills. By the same token, you don’t want to charge too little as then the advertiser might think that there is no value and head for the hills.
How do you find that sweet spot?
How do you determine the proper amount to charge for advertising?
Over the last month or two, I have received a couple of inquiries from people that were looking for guidance regarding these very questions so I thought that I would tell all of you how I approach this situation.

1. Determine The Type Of Ad

Before you even begin to discuss the price of advertising, you first need to verify that you are on the same page with regard to the type of advertisement. Does the advertiser want to purchase a text link on the sidebar? Or maybe they want a 125×125 banner ad? Should it display on every page or just the homepage?
Depending on the type of advertisement, you will likely want to charge different amounts. Not every type of ad, or ad location for that matter, is created equal and the price should reflect that.
In addition, you will want to confirm the site that will be advertised with the link. It is quite possible that the destination URL is one that you do not want to associate with your blog. Will your readers be upset if you advertise for a particular type of site or service? Keep that in mind as you decide whether or not you should accept a particular advertisement.

2. Determine How Badly You Want The Advertisement

Now that you are on the same page with the advertiser, you need to start thinking about the price. But before you can determine the right price for your blog, you first need to ask yourself how badly do you want to land this advertisement.
Many bloggers are concerned that they will set their price too high and the advertiser will decline the offer. If you find yourself lying awake at night worried that the advertiser will turn you down, you might want to be a little more conservative with your pricing – but don’t cheat yourself either – in an effort to land the ad.
If you are more the type of person that appreciates the opportunity to work with an advertiser, but won’t lose any sleep if they turn you down, then you might want to be a little more aggressive with your pricing. When you are aggressive, you will find that many people turn you down but some will say yes.
The important thing is to set a price that makes you happy while also providing fair value to the advertiser.
Sure, we’d all love to be charging $500 per month for an advertisement but that is not realistic for most blogs. To the same extreme, will you really be happy if you charge $1 per month? If you are, let me know as I’d like to talk.

3. Landing The Advertisement

So, now you have defined the expectations regarding the type of ad and you have determined the pricing that makes you comfortable. Is there anything else that you can do to help land the advertisement?
Something that I have found to work quite well is to offer the advertiser an opportunity to receive a discount for an extended, pre-paid agreement.
For instance, you can offer the advertiser a 5% discount if they commit to a 6-month run on your blog. I’ve typically offered discounts on 6-month and 12-month terms, but you should experiment to see what works well for you.
In the end, you want to be sure that you are fair to the advertiser but that you are also fair to yourself. Whether that means you should charge $5 per month or $75 per month depends on numerous factors, including the one often overlooked – how badly do you want it.
Hopefully this helps prepare you for when the time comes that you need to tell an advertiser how much you charge. Once you are prepared, you might want to consider creating an Advertising page (I need to take my own advice here) that you can point potential advertisers to when they ask about your pricing.
Do you feel better about setting your price now?

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{ 38 comments… read them below or add one }

Scot Duke September 10, 2008 at 7:57 pm

What type of agreement needs to be drafted?…wouldn’t there need to be a contract with the advertiser that outlines the deal points in case there is a dispute a month later and the advertiser refuses to pay for whatever reason?
Advertisers stiffing Bloggers is becoming popular now days…maybe some advise on how to close the deal would help.
Scot Dukes last blog post..The Saddest Male Models In The World

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Jon@Custom T-Shirts September 11, 2008 at 12:07 pm

I always require them to pay up front. If they don’t like it then they can go elsewhere.
My blog isn’t going anywhere, but they could be!

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James@System Speed September 11, 2008 at 2:28 pm

What you can do if it is allot of money is to use an escrow service. To try and keep both parties from getting cheated.

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Nick@romandock dot com September 27, 2008 at 2:06 pm

An escrow service sounds like a good idea in this situation, but how much would it cost and who would be responsible for paying that amount?
As a general practice it might not be such a good plan, but perhaps use it as a suggestion/option if they are apprehensive about paying upfront “if you would prefer, you could put the money with I have done business with them in the past and they have good customer service”
Nicks last blog post..I’m making progress, eventually I’ll be caught up.

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Kelvin Kao@Puppet Kaos September 10, 2008 at 8:18 pm

I’ve been sent an email from an advertiser about putting up a video promo. It’s for an adult puppet series though (a puppets-gone-wild sort of series) and only UK traffic counted. I turned it down because the series didn’t even look that great, I would like to keep my site PG, and I don’t get that much traffic from the UK anyway.
Kelvin Kaos last blog post..O Where Is My Hairbrush

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Sleep Aid September 10, 2008 at 8:30 pm

Besides the size of the advertisement I like to factor in who the requestor is. If I feel the advertisement is coming from somebody more mainstream I will charge up to $300 and for lesser requestors anywhere between $40-$100.

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JLow September 10, 2008 at 9:28 pm

Hey Derek, thanks for this timely post. I had just received an email enquiring about the same for my blog.
But, it just dawned on me that that email may have actually been spam… Will see.

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kouji@haiku poems examples September 10, 2008 at 9:30 pm

great advice here. think i’ve seen ad spaces offered for $1.25 though. :O
koujis last blog post..haiku poem: drop

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Stone matrix September 11, 2008 at 1:32 am

Great advise

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Kelvin Kao@Puppet Kaos September 11, 2008 at 2:33 am

Although there are people that said you should put up an ad since the very beginning even though it only gets you 13 cents per month, I think differently. I think, say if an ad would only give me 2 bucks a month, and i have 20 regular readers. I can either charge them each a dime so they don’t have to see the ads, but since I’m so generous, I am going to pay their dimes out of my pocket… sort of buying a round for everyone. It’s only 2 bucks for me to pay, but it makes the site look all clean for more than 20 people. Of course, if there’s enough money involved, then an ad is justified. But, if the ad can only give me, say, 5 bucks a month, I’d rather not have an ad. Different perspective, I guess…

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olly@Boss Effects Pedals September 11, 2008 at 4:48 am

I think this is good advice – I think I would prefer to use my own adverts such as affiliate links that I could chop and change where I liked and keep them the most relevant to the readers.
I certainly wouldn’t put on an advert on my blog unless it earned me a reasonable amount of money such as $30 + per month. I think if I was in a position to get that kind of money offered, I must be generating good traffic which could convert to a lot more by going the affiliate route.

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Ling@Uptake September 11, 2008 at 5:24 am

Easiest way to do this is to charge based on the number of page views or clicks. There are softwares available for setting up advertiser management and to keep track of the stats. I don’t remember the names, but do a search and you should be able to find plenty of them.
Its fair to both sides, and an advertiser won’t cancel the contract, since he’s paying only for results.

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Nicole Price September 11, 2008 at 7:13 am

No, Derek, I am afraid that I am as clueless as I was before I read your post. Particularly for let us say a new personal blog that I have launched and have not monetized in any way till now. What would be the most sensible way to go out and get ads?

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Cesar@Webmaster Blog September 11, 2008 at 12:17 pm

Nice advices Derek, you can also take a look at other websites prices that sells advertising like in DigitalPoint forum.
You also must setting prices according to traffics. The more traffics you get the more expensive will be the price.

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JLow September 11, 2008 at 9:32 pm

Hi again,
That enquiry which I thought could have been spam, has actually replied- they wish to advertise their service for downloading ringtones, on my parenting/fatherhood blog.
While I know the decision whether to go ahead is entirely mine, what does everyone here think the charges ought to be, for advertising that is totally unrelated to the theme of the advertiser?
They are only seeking a text link to be put up.
Looking forward to what people think, and thanks in advance!

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Child Molesters September 12, 2008 at 2:29 pm

The price must be not too low cuz they might think that your site is not worth it. And if your price is too high they might think you are to much. So think about something avg.

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Captain Falcon September 12, 2008 at 9:33 pm

There are so many facets of marketing. One thinks that you need a college degree but only just common sense.

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Damien Riley September 14, 2008 at 11:00 am

Great post. I’m going to send it to all my social media since #1 your is always top-notch and #2 I think this is a great resource. I average about 125 uniques a day and the middlemen seem to think ads on my site are worth about $15. That’s what the 125×125’s go for currently. I imagine as my daily uniques rise, I will up my pricing.

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Bob @ iPod Repair September 15, 2008 at 8:13 am

Great advice!! Thanks!

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Shawn Knight September 15, 2008 at 8:02 pm

Good post Derek. I use to worry about this as well, when I would receive inquiries about advertising on my tech site.
I found the best method was to just ask around to other similar sites and see what their average rates were. I discovered that I was low balling my prices like crazy!
Over the years, I have come to adopt a set price list for each ad spot and adjust it yearly or bi-yearly as I see necessary.
I agree that long-term discount deals are good (I have a few running as well), but be aware that you may end up low-balling yourself, should your site really take off. In that scenario, you could have charged a lot more for a spot but it is locked in for up to a year at a low rate.
The final suggestion I would offer up is to be patient. It may take a few months to fill a spot, but don’t lower your price just to sell it quick. Get what you want and deserve for the spot – It will eventually sell!
Shawn Knights last blog post..BIC Promo Pens

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Justin@Airsoft Guns September 17, 2008 at 4:52 am

For the few of my sites that I’ve advertised on, I’ll arrived at the rate by simple negotiation. If one follows your tips, though, they can probably get a better deal.

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Terry @ SEO Blog September 17, 2008 at 7:56 am

Interesting article…. I bet as your site has become more popular you prices have increased
Terrys last blog post..iPod Repair and iPhone Repair by The Pod Drop

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malgal128 September 17, 2008 at 11:39 am

I started out charging $20.00 a month per page and my advertiser grabbed up several pages and paid me upfront for a 12 month period. For the second ad enquiry, I increased it to #25.00 per month and the same happened. So far, I only accept a 12 month contract and payment upfront. My latest quote is $30.00 per month X 12 months. For short term like just a month, I charge $100.00. Some people tell me I charge too cheap. I don’t really know. I do it by trial and error and so far, so good. I hope this helps. If it is too cheap, I’d rather keep my page clean and tidy.

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Steve@Free iPods September 18, 2008 at 2:14 pm

I’ve just had a random mail from a large site asking to advertise on two of my sites. They want a six month deal, single ad.
The sites get combined uniques of 15,000 a month on average and I have been offered an upfront payment of £950 ($1,900) for the six months.
Seems to good to be true, not sure where to go with it.

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derek September 18, 2008 at 9:39 pm

Sounds like a pretty nice deal – hope you will keep us updated on the status. Congrats!

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Steve@Free iPods September 20, 2008 at 1:07 pm

I’ve been sent the ad code and all seems fine. No particularly onerous conditions, I just have to agree not to put a competitor’s ad on at the same time.
Still can’t believe someone would randomly offer me so much money!

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Steve@Free iPods September 30, 2008 at 10:36 am

Just a quick update, payment promised today, will check my online banking later this evening 🙂

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Soham@Probiotics September 23, 2008 at 9:36 am

I am sure after racing heart and sweating palms and sleepless night, I would either over charge and under charge for the advertisement, so adsense is better for someone like me.
Sohams last blog post..Lactobacillus Acidophilus: The King Among Probiotics

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Tracy September 23, 2008 at 10:25 pm

It is not easy to determine the price for the ad you will be working on. You should have stipulated rates based on all factors and dont go below that. If the customer wants quality, they will come to you.
Tracy

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Nick@romandock dot com September 25, 2008 at 4:09 pm

I like that you mentioned the fact of how badly you want to sell the ad and/or work with a particular advertiser. I think a lot of times people get way too hung up with different blog metrics (traffic stats, subscriber count, etc) when determining advertising prices.
Nicks last blog post..Let The Frenzy Commence

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Steve@Free iPods October 7, 2008 at 1:35 am

I finally got my £950 GBP from Ciao this morning and have their ads up and running. My first bit of site advertising,am happy as larry 🙂

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derek October 7, 2008 at 11:30 am

Congrats! That is great news and I am extremely happy for you with this first bit of advertising.

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Carolee November 4, 2009 at 7:08 am

I’m the Rochester (NY) Work At Home Examiner on Examiner.com ( http://ihid.us?i=ufr) I am currently working on an article regarding this issue.
I have just jumped into the advertising arena myself on my websites and a couple of my blogs. I must say, it is a very complex issue with a lot of factors.
Interesting comments!
.-= Carolee´s last blog ..Keeping the kids busy while you work at home =-.

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derek November 4, 2009 at 9:27 am

Hi Carolee, thanks for stopping by and saying hello! First, please feel free to come back and share a link to your article once it is published.
There are quite a few great comments on this post that dig into some of the issues and questions people face when they start to accept or pursue advertising on their site. As you mention, there are a lot of factors that go into advertising on your sites but the important thing is to set a price that makes you happy and then do your best to provide additional value to your advertiser.
Hope to hear more from you.

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amotherworld March 29, 2010 at 1:49 pm

Thank you for this post. I’ve been searching to find some good information on what to charge for advertising and your post as well as the comments, have helped.

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Jp14@Funny Sports March 29, 2010 at 5:13 pm

I read your post, but I’m not sure if I’m any closer to an actual number. This shouldn’t be too hard for me to guess, I’m gonna say around $100/mo would be with my traffic level should be fair.

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Andrew August 17, 2011 at 9:04 pm

I’m totally new to advertising fees,and have no idea what to charge. A certain person wants a home page listing with about five lines,that includes a text link . I told them $60 dollars for a one year lisitng,but the deal isn’t done yet. Should I be charging more?

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derek August 22, 2011 at 1:24 pm

Andrew, my advice is to charge a fee that makes you happy. If you’re happy with $60 for the entire year, then that is what you should charge. While I might think that is really low, and would prefer to charge $20-30 per month at a minimum, others might think that is high.
Something I’ve used with much success is to offer a slight discount for longer term commitments. As an example, charge $30 per month for the ad but then offer a 5% discount for 6-months prepaid or 10% for 12-months prepaid. The discount, price, and duration are all subject to your own situation but this gives the advertiser an incentive for locking in long-term.
While I know I haven’t specifically answered your question, I hope it helps in saying that really you are the only one that can answer that question. Do you feel you should be charging more? If so, then do it. If you cannot land any advertisers at those prices, you will need to adjust as necessary.

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