Native advertising is a digital strategy focused on delivering a better user experience via unobtrusive ads. When you provide value to users, it results in better user engagement and conversions. This post will explain a guide to native advertising and how to make the most of this strategy.

What is Native Advertising?

You can find native ads as recommended, or sponsored content on a website, or in social media feeds. The thing with native ads is that they don’t look a lot like ads.  They look like part of the page, which is their best advantage because they don’t disrupt the user experience. A native ad enhances the reader experience by adding value without sticking out as a sales advert.

Native advertising offers brands a way to connect with users more naturally. The native advertising’s contextual relevance results in native advertising producing high-click-through rates and conversions.

Native ads are advertising units that intend to draw the user’s attention while enhancing the user experience. You can find native ads:

While Scrolling Your “Feed”

You can find these ads while scrolling through your social feeds. For instance, the ads that appear before or after stories or reels.The feed may include user generated content (USC), business posts, articles, photos or videos.

Ads from Search and Promoted Content

The Interactive Advertising Bureau (IAB) groups these ads on what they call “product feed” They appear in searches and product, service or app listings. Common ad types include product or services ads.

Inside Content Related

The content feed ads appear like sponsored posts, editorial content that may include images or videos. They appear on editorial sites and recommendation platforms.

Source: IAB

How do native ads work?

Native ads are subtle. The idea is that users will barely notice they are paid ads; and when they do, the ads don’t bother them. The interest in native advertising started growing in 2012, because of the brands’ need for non-disruptive advertising.

Source: Google Trends

In native advertising, suppliers (publishers) offer their audience, reach, and quality of content to SSP, ad networks, or advertisers, with the aim to monetize their sites. On the demand side, advertisers and demand-side platforms (DDP) look for the best fit to reach their target audience and achieve their goals.

How can you tell if an ad is native?

That’s the paradox with native ads. Because they look like regular content, how can you tell it’s an ad? For instance, you clicked on an article for “Best Hikes Near Prague”, which led to a post review on the “Brand X hiking boots review”, sponsored by the boots brand. The boots brand pays the publisher of the article for your click. To ensure consumers are not misled, there is a requirement to disclose the content is actually an ad.

You may see some of the following features in a native ad

“Paid Post”, “Sponsored by”, “ Partnered with”, “Promoted”, “Powered by”. These phrases indicate sponsored content.

Source

Other times, a small icon on the top corner can show that is a paid ad. Or you can see the word “Sponsored”. This disclaimer is part of native advertising best practices.

Native advertising channels

Native advertising can be run manually or programmatically. Regardless of how you choose to manage it, you can run native advertising across three main channels:

Search

The sponsored search results that you see on top of your search results. Engines like Google or Bing started serving native ads in the form of sponsored search results.

Publishers can also insert a SERP (search engine results page) on their domain.

Social

Facebook and Instagram streamlined native in-feed and carousel formats. In-feed ads appear in between social media posts or in your news feed.

Open Web

There are content discovery platforms that serve curated content recommendations and in-feed ads on popular publisher websites.

Types of native ads

The interactive advertising bureau (IAB) identified six types of native advertising units.

•  In-Feed Units

In-feed units are paid ads that appear in-line with other content.  When you see sponsored posts that appear in social media or in publisher’s sites like Forbes, for example, these are in-feed ads.

For example, here you can see an in-feed ad from PayPal on Entrepreneur.com

Source

• Paid-search units

Paid search are those ads you can see in the coveted position zero in search results. Paid search results look like organic search results. 

• Promoted listings

These native ads, appear usually when you are browning for purchasing on an e-commerce site. They are paid by brands and look like any other organic listing. 

• Display ads with native elements

This type of native ad looks like a display ad, but they are different from a regular banner because they are contextually relevant to the meda they appear on. 

• Recommendation widgets

You can also find native ads on publisher sites, social media, and search engine results. Recommendation widgets are often at the side of a page or at the end of a post. These ads recommend additional content or products that you may like.

How to Develop Native Ads?

Native advertising is more popular every year, as companies realize its benefits for improving the user experience (and their bottom lines). That’s why organizations are spending more money on native ads.

Source

But, how can organizations ensure they spend wisely and get the best results for their native advertising strategy? Here is how to develop a great native advertising strategy:

1. Set your SMART campaign goals

As with every strategic plan, the first step is to know where you want to go. Clearly define what do you want to achieve. For example, if you want to generate leads, getting more sales, increasing website traffic, or more. Ensure your goals are SMART (Simple, Measurable, Attainable, Realistic, and Timely). Be specific so you can then track the success of your strategy.

2. Define your target audience

Once you know what do you want to achieve with your campaign,  you should understand who is the receiver of your ad. You may have an idea of who is your audience, according to your buyer personas. Factor location, age, gender, and interests to narrow your audience. However, don’t be too narrow, as native ads are a great way to show content to new audiences. The right level of targeting can ensure your ads get to the right users at the right time.

3. Select where you will publish

No less important to know who to publish, is where to publish. As part of your native advertising strategy, you may choose to advertise through an ad network or directly with the publisher. If you choose to go the direct way, examine the publisher’s reach and the size of their audience. Most importantly is to check how relevant is their content for your users. Think as your reader would do, and select publishers that can provide value.

Leveraging an ad network produces more accurate results.  An ad network evaluates thousands of publishers and finds the most relevant for your brand. And all of it happens by the time the publisher page loads, thanks to the magic of programmatic advertising.

4. Build attractive ads

The best strategy cannot succeed if the ads are not attractive to the user. The ads need to catch the attention of the user and encourage them to click them. Keep in mind to test several combinations (A/B testing) until you find out which ad is better for your campaign.

5. Define and allocate your budget

Assigning a budget for the campaign can make it or break it. How much your campaign will cost will depend on how much do you spend on your campaign items, like your cost-per-click. Identify what is your ideal CPC and how much is your spending limit.

6. Monitor, test and adjust.

Once you launch the campaign, you should track the performance of your ads. Test headlines and images, the KPIs like number of impressions, clicks, and conversions.

These six steps can help you design a successful native advertising strategy.

Read more: Social Media Strategy Statistics & Trends

Best Practices for Native Advertising

1. Leverage other media types like podcasts and video

Static and dynamic ads are the most popular, but audio and video are increasing in popularity. Podcasts, in particular, are increasing in popularity. Podcasts’ ad spend is expected to rise to $1.6bn by 2022. Podcast ads are accessible and unintrusive because. Most users are doing other things when listening to podcasts. Therefore, when you add native ads to podcasts, they integrate with the content.

Video is another media that is increasingly popular. With the time people spend watching videos, video ads are proving to be extremely effective. As much as 78% of publishers get more traffic to their website by using video ads

2. Test often and accurately

Ads that blend with the surrounding content usually gets more clicks. Instead of standing out, they keep users on the site for longer. These days, native ads are not only placed on websites but also on e-commerce sites, mobile sites, and applications. To understand the impact of each ad, it is important to measure and track the right KPIs. Besides common metrics like impressions and clicks, measure the engagement of the users, comments, and shares.

3. Do your research and focus on the clicks that matter.

Ads shown in the search result deliver more value to users because they align more with what the user is looking for. Since the user intent is high, you get more value out of each dollar you spend in the campaign. Do your research about what type of content attracts more your users.

4. Use influencer marketing

A recent survey found 84% of consumers make a purchase based on an influencer’s recommendation. As consumers spend more time on social platforms, they are exposed to influencers’ content. Most people listen to influencers because they trust their expertise in the product or category.

While influencers have been around for a few years, their impact is growing, and set to be worth $15bn by 2022. For 2022, there will be an increase in short-form video content, and brand media programs.

5. Don’t forget mobile ads

Their mobile is where users are most of the time anyway, so investing in native mobile ads is the sensible way to go. Unlike interstitial ads, native mobile advertising blends with the experience and enhances it. According to one report, native ads show 18% more purchase intent than display ads.

Best and worst examples of native advertising

Now that we know what native advertising is and best practices, let’s see some examples.

The 3 best native advertising examples

• The Onion’s Tax Ad

First, let’s start with a classic. Back in 2012, this well-known, funniest native advert starts entertaining from the headline: “Woman Going to Take Quick Break After Filling Out Name, Address on Tax Forms”. 

Source

This advert is a textbook example of native advertising. The Onion created this piece for their client. At the time of publication, it was surrounded by the client’s (H&R Block) banners. It resulted in increased brand awareness. 

•  Clarins makeup and skincare

More recently, The campaign of Clarins focuses on paid posts and blending content for mobile with the “Seven plant extract to boost your makeup routine and skin”

The article doesn’t look like an ad at all. The campaign delivers value to customers and fits seamlessly with the media where it appears. The article subtly promotes the advantages of Clarins, directing users to the promoted product. 

• 8fit Fitness

8fit is an app that offers custom home workouts. Its native ads campaign appears in several premium publishers’ websites. They have different images, headlines, and content according to the media they appear, combining video, image, and sponsored content.

When you open the video that promises to burn 300 calories in 9 minutes, it drives you to download the 8fit app. Fitness lovers then can get access to workouts, meal plans, and progress tracking. The ads don’t feel like ads.

Worst Native Advertising Campaigns

Here is the Hall of Shame: “Will millennials completely shun the office?”. The New York Times. 

Yes, at the top of the hall of shame is the New York Times. That’s proof that everybody makes mistakes.

This Dell sponsored post misses the mark on engaging the target audience (millennials). The language is not aligned with the New York Times editorial content. Therefore, it doesn’t hit it.

Pros of native advertising

For advertisers

• Branded native content generates more trust from users. From Generation X and beyond, these audiences trust sponsored content more than traditional adverts. This type of content resonates with young adults because it is more entertaining and engaging.
• Native ads generate more click-through rate than display ads. Native ads perform well for advertisers in several niches.
• Builds brand awareness. With native advertising, it is easier to increase your brand awareness, on average 53% more views than traditional advertising.
• Optimizes the targeting.  Native can contextually target specific audience segments. As an advertiser, you ensure the ad reaches the right user.

For publishers

• Higher engagement. Ads are more relevant, which doesn’t disrupt the user experience, resulting in a higher engagement and click-through rate.
• Better eCPM. Native ads usually bring high eCPMs, impressions, and engagement, resulting in more attractive placements for high-paying marketers.
• Users stay longer on the site.  Resulting in users being more engaged with the brand and content.

For users

• More value. Native advertising is less “salesly” and provides useful information to users. Users then consider native advertising as more valuable than traditional ads.
• Better experience. Native ads are more user-friendly. They integrate with the surrounding content giving a more natural experience to users.

Native advertising challenges

Native ads to have a lot of advantages. That being said, there are some use cases where native advertising can be challenging. 

• It can be tricky to measure. While some KPIs are not that hard to measure, measuring the ROI (Return on Investment), impact, and effectiveness of the campaign.
• If you don’t leverage an ad network, it can be time-consuming. Creating native ads can be more complex than traditional ads, and may require many actors.
• Choosing the right tool can be daunting. Any organization new to native advertising can get confused by the many tools available. Should you choose an ad network? An SSP? An ad exchange? CodeFuel makes it easy for you with an all-in-one monetization platform designed with publishers in mind. Leverage premium advertisers and publishing sites with an easy-to-use, high-yielding solution.

Is native advertising effective?

Native advertising is generally more effective than traditional display ads. Here are some statistics to prove it:

What drives marketers to use Native vs. Traditional Ads? 

Statistics source

What is Programmatic Native Advertising?

Programmatic native advertising is designed to make it easy for advertisers and publishers to buy and sell native ads. Brands and agencies use a demand-side platform (DSP) to set a budget and requirements to publish your ads. Publishers, on the other side use a supply-side platform (SSP) to sell their ad inventory. Both publishers and advertisers get matched up in real-time via native advertising platforms.

How to Choose The Best Native Advertising Network

Here are six factors to consider when choosing a native advertising network: 

• Audience: Check that the native advertising network’s reach covers your target audience. This includes verifying the locations where the platform drives traffic from. If your product is targeted to English-speaking countries, your ad network reach needs to target those too. Look at the niches and industries they cover.
• Ad formats: The more variety of ad formats the ad network covers, the better. Choose a solution that can give you in-feed, recommendation widgets, mobile native ads, etc.
• Targeting options: Different tools deploy different technologies. When you compare platforms, pay attention to the targeting options they offer. While one platform can let you select publishers, others won’t give advertisers that much control.
• Bidding models: Each platform offers different bidding models. For example, manual or enhanced cost per click, cost per action, cost per view, cost per mile.
• Reporting: Consider how the system will report performance. Choose a solution that offers the most information. Ask which KPIs can you measure, if you can export and customize reports, and what are the filters available.
• Price and requirements: The signup price needs to align with your advertising budget.  Before signing up, check the bidding models, requirements, and sign-up costs.

All Native Ad Formats

According to the IAB Standard, below are the six more common types of ad units deployed, with examples from companies (Image sources: The IAB Native Advertising Playbook).

• In-feed units

Ads that appear in the feed, mostly on social feeds. It can be a summary or related to the sponsored content or an ad that takes the user to a branded content site.

• Paid search units

This type of digital marketing strategy allows advertisers to pay search engines to place their ads higher on Search Engine Results Pages (SERPs). Paid search ads usually work under a Pay per Click model.

• Recommendation widgets

These are a type of native advertising where ads are delivered via a widget — icons, pull down menus, buttons and similar that invite or request an action from the user—.

• Promoted Listings

Promoted listing are product ads appearing in marketplaces such as Amazon, eBay, Etsy and similar. They are included in search results, listing pages and other placements.

• In-ad with Native Element Units

These type of ads are an ad within an ad, meaning, inside the ad there is another type of content relevant to the publisher.  For instance, a recipe with a link to a cooking website inside an ad for a food product.

• Custom

These ads may combine two or more of the types above. 

The CodeFuel approach to native advertising

CodeFuel is a complete monetization platform with a mission to deliver native ads that enhance the user’s experience and journey. Serving highly targeted ads in a way that doesn’t disrupt the UX, will generate more revenue for the publisher.

CodeFuel leverages machine learning and advanced analytics to capture the intent of the user and the context of the digital media they are reading. The ads served with the CodeFuel line of products integrate smoothly with the context, delivering better results for advertiser and publishers. Learn more about the CodeFuel approach to native advertising.

Related Content To Read:

• Social Media Demographics and Age Groups

• Social Media Strategies,Statistics and Analyzis Of Media Users

• Native Ads vs. Display Ads: When and How to Use Each

• What is User Engagement: How to Measure and Analyze 

• How To Apply For Google Adsense: Step by Step Guide 

• How to Make Money with Google Adsense

Read Glossary Related Content:

• What is a Banner?

• What is Advertising?

• What is Behaviour Tracking?

• What is an Ad Format?

• What is an Ad Exchange?

• What is a Target Audience?

Monetizing your website with ads is a great choice if you set your prices right. Learn our ultimate guide to know how to charge from advertising on your website.

How Much Does It Cost to Advertise On A Website In General?

Advertising spending is different for every business, but ‌you would expect a small business to spend less money on advertising than large enterprises. The global digital advertising market in 2022 will be worth $602.25 billion.

On average, businesses can invest anywhere between $584 to $10,000 a month in a digital campaign, depending on their goals and company size.

For Small Businesses

A 2021 survey among small businesses in the U.S. showed that 45% of respondents paid for digital advertising.

• Average spending in digital advertising for small businesses – $584 monthly

For Medium Sized Businesses

Much of the digital campaign costs will depend on the cost model you choose. Paying with a Pay-per-Click model can be less expensive than CPM models. A common rule is calculating your advertising budget as a percentage of your revenue. Medium B2B companies should spend between 2 and 5% of their revenue on marketing and advertising.

• Average spending in digital advertising for medium businesses  – $1250 monthly

For Large Companies

Large companies have a larger budget for online advertising and can spend an average of $10,000 a month on advertising. 

Global advertising spending will continue to grow; according to Statista, the digital advertising spending projected for 2026 is $876 billion.

As we previously said, much will depend on your network ad pricing model.

Sources: Statista, The Cost of Digital Ads

What Are The Average Online Advertising Costs Per Ad Channel?

Digital ad campaigns can cost from hundreds to thousands of dollars per month. Whether you use Pay-Per-Click advertising, SEO, or Content Marketing, the costs will vary.

PPC

Pay-per-Click pricing depends on several factors. Different industries may have very different cost-per-click rates. For example, insurance and legal ads tend to be the most expensive. The average Cost-per-Click in Google Ads is between $1 and $2 on the search network. In the display network, the cost averages $1. The average CPM is $3.12 per 1000 impressions. 

SEO

SEO services are a cornerstone of digital marketing. After all, if people cannot find your company in search results, all your marketing efforts are useless. SEO services costs’ can vary according to the SEO plan and how the agency prices their services, if by the hour or by the project. The average SEO cost for US Companies is between $150 and $300 an hour. In 2022, most SEO projects will cost between $1500 and $5000. Many companies offer plans that include content creation/writing.

Content marketing

The cost of a content marketing campaign will vary depending on the type of plan, the industry, and the type of content. The rates can go from $2000 for small companies to over $60,000 monthly for enterprise businesses. The rates should include a comprehensive content marketing package comprising a content audit, an inventory of your existing content, analyzing your target audience, and creating a custom content plan and editorial calendar for your business. Agencies often offer these services with an SEO package.

The Average Cost of Website Advertising

As we mentioned above, some niches pay better than others for online advertising. Thus, if your site happens to be in the lucky industries, you have more chances of higher revenue.

What Influences Your Website Ad Rates?

Before getting into pricing models, we should understand that there are features that impact how much can you charge for adverts on your site. Consider that ad rates can vary greatly, from $0.01 to $10 per click.

What makes a website ad-worthy? Well, there are benchmarks your site needs to meet in order to start selling ad space. Each ad network and platform has different requirements for publishers.

The golden rule is that the more value your ad placements bring to advertisers, the more they’ll pay. 

Traffic and reach are two of the most important factors to consider regarding how valuable can be advertising on your site. Here is a list of the most common:

1. Niche

Advertising on your site must make sense for potential clients. That means, they need to see ROI from advertising on your website. The amount you can charge for ads will also depend on your niche. The bidding rate varies greatly according to the industry.

The highest-paid niches are usually legal, finance, and insurance sites. Review and comparison websites are also among the ones with top advertising rates.

2. Traffic

Image source

This is the characteristic ad networks look at first to evaluate a website for its advertising value. The more visits your site has, the more people see the ads placed on it, generating more leads and conversions for the advertiser.

Know your traffic and performance metrics. Check not only the number of visitors but also the number of page views. Track your site’s performance changes to identify hot spots where the activity peaks. But the most important traffic metric you should look for is monthly traffic, how many visitors view the site per month.

Remember that some pages on your website attract more visitors than others. So, a page may make a different number of impressions (thus, money) than another. If a page can contain 4 ads, will make more impressions per page view than another that can only have one ad. Take into account that too many ads can disturb the user experience.

Ad networks and platforms usually have traffic minimums you need to meet in order to qualify for advertising. Once you reach the required number of visitors per month, you can monetize through an ad network, monetization platform, affiliate marketing, or other options. How many visitors should you have? This will depend on your niche and audience. Some will need hundreds of unique daily visitors, and for other companies, the number needs to be close to several thousand.

Potential advertisers want to reach their target audience and expand their reach. So, if the amount of traffic on your website is too low, you should first grow your numbers to become attractive to advertisers.

3. Content

Image source

The quality of the content on your website is the other big factor that influences your rates. Attracting visitors requires publishing quality content consistently. The content should be varied, relevant, and provide value to the user. The more your content is specific to your target, the more value the visitors can get from it, and the more valuable is your website.

Specific topics also increase your site ranking. If your users can find the answer to a specific question on your website, search engine algorithms will rank your site higher. You also have chances of getting a coveted featured snippet. The more unique your content, the more value you provide to users and potential advertisers.

When creating content for your website, consider the buyer journey. Create content that addresses the awareness, consideration, and decision stages. There are certain types of content that are more attractive to advertisers because they have high conversion rates. An example of that is a comparison or review site.

4. Performance

Image source

Your site performance is key for generating a good user experience. There are on-page factors that can affect negatively your site performance. Start by having a clean design and easy navigation. Take care of potential latency problems by ensuring your site and images load quickly. Finally, make sure the site responds to mobile devices.

5. Audience

Image source

Knowing about your audience is critical for a successful website. Pay attention to your audience demographics, interests, and behavior. Factors like age, location, gender, economic activity, or income can give you insights about who are your users and which type of advertisers you may attract. The more information you have about your audience, the better you can target it.

If your site targets your advertisers’ typical clients, chances are that your site will become attractive for companies. After all, your site is where their potential clients hang out or go for

answers.

Pricing Models

There are a few ways you can charge per advertising. The pricing model will depend on your type of website and audience. Does your site provide a lot of exposure? Review and informational sites are included in this category. Maybe your site encourages conversions? Examples of this are e-commerce sites.

Here are the most common pricing models:

CPM – Cost per Mille

You can charge the advertiser per impression. Every time a visitor views the ad, it counts as an impression and it adds to the total bill to the advertiser.

A more popular and simpler way is to charge per thousand impressions. Cost per Mille stands for cost per a thousand impressions. It means how much do you charge advertisers every thousand times an ad gets viewed.

How do you calculate CPM?

CPC – Cost per Click

In this model, the advertiser pays you every time a visitor clicks on their ad. This is a popular method of pricing since it is less risky for advertisers. Depending on the rate, it can be profitable for you as a publisher. The downside of this method is that it is unpredictable since you don’t know how many people will click on the ad.

How do you calculate CPC?

CPA – Cost per Action

This option involves charging advertisers a fee for each specific type of action, like leads or sales. Also called Cost per Acquisition, this method offers a higher reassurance to advertisers because they pay for more concrete results. In this model, you place the ad on your website and get paid only when someone clicks on it and completes the conversion on the advertiser’s website.

The conversion can be registering for an event, purchasing a product, or filling up a form. Usually, publishers get paid a percentage on each conversion that can range from 20% and up. Therefore CPA can be very profitable for publishers. The downside is that you depend on the advertiser making the conversions to get paid.

How do you calculate CPA? 

Flat rate

You can also charge a flat rate to advertisers, for instance, charge a monthly amount. This model can be very predictable since you charge a fixed fee regardless of how the ad performs. However, this pricing model can be risky for advertisers so they may look more into your website performance.

What Are the Most Popular Ad Formats

Besides choosing a pricing model, you should understand what type of ads are you going to place on your website. Tip: Mix different types of ads. Here are the most popular ads formats:

Banner Ads

These are the most popular ads, and you usually see them on top of pages but they can be on almost any place on a page. There can be different sizes too.

There are also vertical banners, called skyscrapers

Banners can also be square, like the ones you see on the side of a webpage.

Video Ads

Video ads are becoming more popular every day. According to a report from eMarketer, marketers will dedicate 28.8% of their budgets to digital video ads by 2024 from 24.9% in 2019.

Image source

Video ads engage and keep the attention of viewers, increasing the time-on-page. However, when videos are too big, they can cause the page to load slower, disrupting the user experience.

Native ads

Native ads are adverts that blend with the page. They are also called contextual ads since they integrate with the text, being similar to the site content. These types of adverts don’t disrupt the user experience but enhance it, by providing value to users.

There are three main types of native advertising:

• In feed/In content – The ads are integrated into the content pieces or social feeds, trying to blend with the original content.

Image Source

• Content recommendation ads – Usually displayed alongside editorial content, typically at the end of an article, they feature recommended ads or content.

• Native content ads – Also called branded ads, they display unique content on a publisher’s website.

Interactive ads

Interactive ads encourage viewers’ participation. Interactive advertising can appear in social media, videos, web banners, or display windows. Examples of interactive advertising can be an interactive display, a gamified ad, a contest, or a poll.

Ad sizes according to format:

Choosing the right ad format can be the difference between catching visitors’ attention and missing it.

Keep These Metrics on Track to Attract High Paying Advertisers

Ad viewability

Placing ads on your site is not very useful if they aren’t easily visible. Ad viewability refers to how visible ads are on a website. An ad is considered visible when at least 50% of it shows on the screen for more than one second. This is the standard for measuring an impression.

Ads can lose viewability for several reasons:

1. The site has ad blockers
2. The site is getting bot traffic
3. Poor ad placement
4. The page takes too long to load
5. The ad is below the fold

Also, the position, size, and layout of the ad also can prevent visitors from viewing the ads.

How do you measure viewability? 

Active views are the percentage of the ad’s total impressions that are viewable.

Viewable % = (Viewable Impressions) x 100
Measurable impressions

Reach

Reach is the number of people that are exposed to an ad during a specific time period. There is a difference between impressions and reach. Impressions measure the times a user saw your ad or content. The reach measures the number of unique people that see your ad.

CTR – Click-Through-Rate

This metric measures the number of clicks the ad receives divided by the times the ad is shown.

How do you measure click-through rate?

CTR = Total number of clicks
            Total impressions 

For example, if you have 100 clicks on 2000 impressions, then your CTR should be 5%.

Conversion rate

This metric is calculated by dividing the total number of conversions by the number of interactions in the same time period.

For instance, if you had 60 conversions from 1000 interactions, your conversion rate would be 6%.

Conversion rate = total number of conversions
                                Total number of interactions

How Do You Price Advertising On Your Site?

Calculating how much you charge for advertising is the result of a combination of factors you should consider. You should determine a rate that helps meet your monetization goals and at the same time attract high-paying advertisers to your niche. Here is what you should take into account step by step.

1. Determine where are your page hot spots

Use a heatmap to understand where are your visitors looking when they are on your site. Identify the best-performing pages. Using this information, determine the ideal ad placement for your pages.

2. Find what is normal to your industry

As we explained above, the rate of ads can vary greatly for different industries. Check your industry benchmarks to know how much is the CTC/CPC. Then compare the rates on your niche. Some niches pay better than others.

3. Consider your website metrics

Check your CTR on your website. The revenue you’ll get from advertising will depend in great part on how many people click on the ads. Pageviews, CTR, Number of Clicks, and Cost per Conversion, affect the total revenue you can get from advertising. Considering that the average CTR for ads on Google display is $0.58, let’s see an example in the table below:

Tips to Price Advertising on Your Website

• Not all visitors are the same. How much value a visitor is as a lead for your advertiser can influence your rates and pricing. If your site is geared to people buying cars, these potential customers are worth top dollars for your advertisers, therefore, they can spend more to capture them.
• Focus on advertisers with the highest lead value. Your potential for revenue depends on providing quality leads to your advertisers.
• Prevent “banner blindness”. Highly targeted ads can catch user’s attention.
• Your site’s E.A.T also affects your ads. If your site has the expertise, is authoritative and trustworthy, the ad on the site are seeing as trustworthy too.

How much can you earn according to your metrics?

Case 1: Low CTR and low number of clicks

Case 2: High CTR and number of clicks

Here you can see that for the same number of page views when the number of times an ad gets clicked grows, the earning grows.

4. Test by Yourself How Much an Ad on Your Site Is Worth

Now is the time to check whether your online advertising strategy is correct. Once you know your metrics, your audience, defined your rates and type of ads, test your ideas. Start by adding a few advertisers and check the ad performance. This will help you get a more accurate picture of how much an ad on your site is worth to advertisers.

5. Project sales

Projecting how much you might sell from ads can help to get a better idea of how much you should charge. Try to calculate how many ad units you might sell from your site. Calculate how much available space for ads you have on your website.

A good starting point is to look at the ad placement and format. How many ads you can fit on your page without it being cluttered? What is their size and position on the page? Keep in mind to calculate how much of the ad space you will sell through a pay-per-click program and how much you will sell yourself.

6. Look at your competitors

Take a look at what your competitors are charging for advertising. Similar websites that attract the same audience are the obvious choice. Your audience can also give you insights. Check where your target clients are advertising, list the prices per ad size, placement, and frequency.

7. Calculate your CPM

CPM is the cost to reach a thousand views of an ad. As a publisher, you should calculate how much will cost for an advertiser to run an ad a thousand times on your site. Compare your CPM with those of your competitors to see if your need to adjust your rates.

8. Define your minimum rate

How much do you need to charge to make a profit? The first step should be defining what your minimum rate. Analyse your costs and what is the annual profit from advertising you need to make.

Let’s say your business expenses will be $100,000 this year, and you have projected to make $30,000 from sales and other non-advertising income sources. You’ll need to make $70,000 from selling advertising space.  Once you know your profit needs, your competition, and how much is your target audience you can set your own rates. Remember to include any discounts or promotions you will offer.

Why a Monetization Platform Can Be a Solution

A monetization platform gives you the opportunity to tap into the best pricing schemes without the hassle. CodeFuel is a complete monetization platform, where you can leverage search and display ads for your site. The platform bases the ads on high user intent, thus maximizing conversions and optimizing the user experience.Learn more about how to optimize your advertising monetization by contacting us.

FAQ’s About How Much to Charge for Advertising on Your Website