In general, advertisers are looking most for three qualities that we will detail in a moment. Regardless or whether your eBiz possesses one, all, or none of these qualities, you will always be able to sell advertising on your site in one way or another. However, the terms will vary dramatically.
- Best Case Scenario (CPM) – If your eBiz has all three qualities, you will be able to charge top dollar rates on a CPM basis. CPM stands for cost per thousand. The thousand refers to a thousand “impressions.” An impression is how many times an ad is displayed in front of a visitor’s eyes. This is also referred to as “page views.” A ballpark for top CPM rates is $15-$50 depending on the specific characteristics of your site’s general audience.
- Numbers Breakdown – So if you have an eBiz site that attracts 100,000 visitors per month and the average visitor visits 10 pages on your web site, you would have 1,000,000 impressions per month. That is 1,000 x 1,000. And since CPM refers to “1000 visitors,” that is 1000 x your CPM rate (let’s say $25) – So your monthly ad revenues would be $25,000. Not bad for a month’s work! But remember this is for sites that advertisers highly value.
- More Common Scenario (Pay-Per-Click) – Other sites that do not possess all three of the desired qualities will either earn a lesser CPM rate or will have to earn money on a “pay-per-click” basis. This means that you will only be paid whenever an ad that is displayed on your site is actually clicked on. Pay-per-click rates generally vary from around 2 cents to 25 cents per click. And typical click-thru rates range from .2%(1/5 of 1%) to 4% of impressions. So if you receive 15 cents per click and 2% of your visitors click on each ad, you will receive the equivalent of $3 CPM. This will generally result in far less money than CPM but it is the most common form of advertising on small eBiz sites.
- THREE IMPORTANT QUALITIES – The three qualities of an eBiz that we mentioned earlier, which are most in demand by advertisers, are:
- High Traffic Volume – Advertisers much prefer to purchase ad space on web sites that deliver a high volume of traffic. The main reason for this is a practical one. If your site only gets 1000 page views per months, even with a high CPM rate of $25, you would only be getting paid $25/month. Yet, someone from the advertiser’s end would still have to oversee your account, checks would have to be cut, reviews of your integration of the ad would have to be done, etc. The man-hours spent on your small account could never be justified.
The top-of-the-line ad brokers (middlemen between the advertisers and you) usually require you to be receiving over 100,000 page views per month before they will sell your ad space on a decent CPM basis. The top ad broker, DoubleClick, won’t even consider you unless you have a minimum of 1,000,000 page views per month.
- Focused Audience – Advertisers love to find certain segmented audiences that would be particularly receptive to the service or product that the advertiser sells. If your eBiz attracts a random audience with no particular demographic characteristics in common nor any special audience interests in common, you will have a harder time attaining top dollar ad revenue. On the other hand, if your eBiz attracts primarily a certain age group and/or gender, or sports enthusiasts, piano players, business travelers, etc., you will be very attractive to certain advertisers who want to be seen by your audience.
- Lucrative Market Category – A focused audience is good but if your site is focused on people who want to live on Mars, there aren’t many companies in the Martian real estate business who want to get their message across to your visitors.
Lucrative audience categories always include rich people. If your site serves a high-class clientele, you may have to beat potential advertisers off with a stick. Other lucrative markets include travelers, real estate, autos, business people, likely shoppers in any number of retail categories, etc. Also, audiences in age groups somewhere between 15 and 34 are usually more desirable as advertisers often want to target audiences who they believe are not yet set in their spending ways. These are all generalizations as many various focused audiences can find a good advertiser match.
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