How Much Should You Charge for Advertising on Your Website

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.

Also, some countries are more profitable for publishers than others. 

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

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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

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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

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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

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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?

Cost per Mille = (Total ad spend) * 100                           Total ad impressions

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?

Cost per Click = (Total ad spend)                            Total measured clicks

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? 

Cost per Acquisition =  (Total amount spend)                                     Total Attributed Conversions

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.

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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.

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• 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

Pageviews per month	CTR %	Number of Clicks	CPC ($)	Earnings ($)
50.000	0.05	25	0.58	14.5
100.000	0.05	50	0.58	29
200.000	0.05	100	0.58	58
500.000	0.05	250	0.58	145

Case 2: High CTR and number of clicks

Pageviews per month	CTR %	Number of Clicks	CPC ($)	Earnings ($)
50.000	0.44	220	0.58	127.6
100.000	0.44	440	0.58	255.2
200.000	0.44	880	0.58	510.4
500.000	0.44	2200	0.58	1276

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