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Once your site has grown to the point where you’ve outgrown Google AdSense, it’s time to consider paid placement ads. But, how much should you charge? Here’s an easy way to tackle this question.

For starters, there’s really no industry standard or expected amount that webmasters charge for paid placement or CPM banner ads on a website. Sure, there are metrics like impressions and visits, but it would be unrealistic to think that a dollar sign should be attached to each one of them. Here are several attributes that typically determine a site’s “worthiness” for being a good advertising venue:

1. Your SERP rank: If you’re in the top three of Google for a competitive one or two-word keyword, there’s no doubt that niche advertisers out there are aching to be featured on your site. When you’ve achieved ranks like these, they might even be sending you emails to ask for your advertising rates.
2. You’re an authority in a niche market: If your site is synonymous with a niche market (i.e., Edmunds.com for “car appraisals” or Zillow.com for “real estate”), then it would only make sense for your site to be part of an advertiser’s portfolio within that niche.
3. You have a solid niche following: If your site is niche oriented and has a faithful following of people who are interested in that niche, then your site is a good fit for an advertiser. Many of these sites are typically seen in the form of blogs or social networks. An example of this would be Cafemom.com for the “mothers” niche.
4. You have a premium domain name (or a high-profile exact keyword domain name): If you own Trucks.com, Pencils.com or Laptops.com, the worthiness of advertising on your site for people who sell products in those niches goes without saying.

How Will You Display Their Ads?

If you’ve fulfilled any of those attributes, the next step is to determine what kind of advertising you’d like to offer. Static, rotating or CPM?

• Static ads are just that: it’s a box that someone pays for on a time-limit — usually per month. The box, banner or link ad will just sit there for the duration of the advertising terms. It’s then up to you to remove it once the full term is up.
• CPM ads, however, incur a “cost per mille” or 1,000 views. So, your advertiser will pay you $X amount per 1,000 views, which is set at your discretion.
• Rotating ads can be handled either way. You can charge advertisers to be included in a “rotating banner ad” that will show a new ad in the rotation with each page refresh. Some webmasters attach a CPM payment scale to these. Others may choose to simply have ads get placed in a queue and be shown until the payment cycle is up.

How to Determine A Fair Price for Advertising

If you’ve gotten a clearer picture as to how you’d like to offer up your ads, it’s now time to determine what a fair price is. The way I’ve typically done this in the past is with a series of Google searches. For instance: if I’m looking to see how much I should charge for a site about NY car rentals, I’d do a Google search for NY car rentals and throw in additional keywords like “advertise on this site” or something to that effect. Hopefully, it will result in a few niche sites’ “advertise” pages, outlining their pricing structure.

Do this for a handful of sites in your field (aka, your competitors) and see what they’re charging. If they’re smart, they did not include this information publicly and require customers to call and inquire about demographics and site stats. Many others, however, publicly state this information.

Note that there is a standardized ad size guideline. Ads come in many shapes and sizes, but they’re uniformly sized in pixels and controlled by the IAB: an organization that oversees internet ads. Make sure your ad spots conform to these guidelines, and that you don’t invent new and obscure ad sizes on your own :)

Make a list of your competitors, what they’re offering in terms of advertising options, and what each one costs. Note the similarities and determine your price based on them. Remember one thing: advertisers like to know what they’re getting into, and that all comes down to demographics: gender, age, HHI (house-hold income), number of children, education level, etc. They’ll also be interested in site statistics like daily and monthly visits, pageviews, average time on site, bounce rate, and everything else on your main Analytics dashboard. If you don’t want to make any of this public, at least put something together in Word or Excel and export it as a nice looking PDF for them to have.

To see a nicely done advertising offers page, check out the one on DigitalPoint Forums. It has it all: an explanation of what you get, how it works, screenshots of statistics and more.

You’ll find that paid placement advertising is where the REAL money comes in. No longer will you toil over penny and nickel clicks from AdSense – it’s time to look into committed $300, $400, $500/month paid placement box and banner ads. After all, that’s what separates the newbie at-home income crowd from the bigger fish!