How Much Should I Charge for Advertising on My Website: Deconstructing Website Ad Rates

Publishers often ask themselves questions like “how to monetize website traffic” or “how much should I charge for advertising on my site”? The truth is, that online advertising within one niche can drastically differ from others not only in terms of demand and profits but also in terms of website ad rates and the best-performing strategies.

Apart from this, there are also numerous different approaches to mobile monetization and digital channels. CTV content suppliers have no clue about how to monetize an app or how much they can get from online advertising on a music-streaming service. This is why it is important to thoroughly study all the details regarding your digital assets’ pricing depending on their characteristics and the content you are sharing.
Let’s explore factors that play a defining role in determining website rates, and how to charge advertisers using a suitable pricing model.

Website advertising costs: what factors define them?

The industry has continued to grow since the dawn of digital advertising evolution and the introduction of web advertising. According to Grand View Research, the global data monetization market is expected to grow by a 24.1% compound annual growth rate between 2020 and 2027, which is valued at over $1.3 billion.

These numbers are truly impressive, but your audience data isn’t the only factor influencing your revenues. In fact, there are numerous characteristics a digital publisher should consider to determine their best-suitable website rates. Let us start with the numbers on the supply side that can help to determine how much to charge for ads on the website.

One should know that there are several significant features, unique for each website that can greatly impact your web ad price. For instance, web banner advertising rates can vary from $0,01 to $10 per click, depending on many important factors like:

• Geo
• Type of traffic and amount of traffic
• Audience

First of all, it is important to remember that there are certain benchmarks or requirements for digital publishers to fulfill in order to start selling ad space on their web pages. These can vary from platform to platform, depending on the monetization solutions you’ve chosen, but the general rule is the more value your ad placements can potentially bring to the advertisers, the more they are willing to pay for it.

Major giants like Yahoo, YouTube, Facebook, and Instagram can charge from $100,000 to $450,000 daily and more for online advertising on their front page. These websites have millions of viewers and can potentially bring enormous profits to anyone placing their offers on these hot spots.

So, when it comes to calculating your potential ad costs, take the following factors into consideration. 

Traffic

The more visitors you have, the more people will see an online ad and the more leads it is likely to generate for the business from one simple message. Marketers are willing to pay thousands of dollars for a single ad on a single page if they bring great results.

Measure your daily and monthly visits. To evaluate your online advertisement rate, you should first understand your traffic metrics. On your website, performance measurement page, or platform, check the total number of visitors and page views.

Usually, you can view the numbers for different time periods to learn how your site’s performance changes over time, but the most basic number you need now is monthly traffic, so make sure you are viewing performance per month, which is for the last 30 days.

Opt for harmony in ad experience. One page view stands for the number of unique visitors who opened the page. Some pages within one website perform better than others, so different pages can bring you different amounts of money within the same period. 
If a page contains 3 ads, you would get 3 ad impressions per 1-page view.

The more impressions (or other actions, depending on your pricing model) you get, the higher your potential profits. Nevertheless, please also note that too many, let's say, banner ads can destroy your website’s user experience or result in low engagement rates and huge page load.

Embrace ad platforms. Once you’ve reached a certain number of visitors per month, you can start monetizing your pages via Google Ads, affiliate marketing, or the supply-side platform (SSP).

This number can vary greatly depending on your niche and audiences — some marketers claim it's enough to have 250 unique daily visitors, while others argue this number should be as high as 2000 per month. The truth is that you should reach the essential number of monthly visitors required for a particular ad platform.

For example, normally, a few hundred visitors per day might be sufficient for Google AdSense, but it's important to focus on providing valuable content and adhering to AdSense's policies.

There is no minimum traffic requirement at Amazon Associates and a couple of other platforms. However, at many alternative platforms, the essential number of daily visitors is pretty high, so always read their publisher policies beforehand to save your time.

Potential advertisers want to reach their target audiences, but if the amount of traffic on your web pages is still too low to start monetizing, you should first grow your website to ensure it will be seen among, for instance, Google search engine search results. A high search engine ranking can be achieved by link building, writing the blog, or getting a promotion on other resources with guest posts, etc.

Content

How much does an online ad cost on web sources that have great content and domain rating? Display network platform usually provides $1 for one click; in the CPM advertising model, this is usually $3.12 per thousand served ad impressions. However, there are also premium web sources, aka exclusive inventory, where clicks and impression serving can cost more. Knowing this, owners of such resources normally opt for PMPs (private marketplaces) or direct deals with advertisers (which, by the way, are also available within average programmatic ad platforms like SSP).

Assess your content niche. Rates for websites can vary greatly depending on their content, as this is the main value you offer to users. Attracting visitors requires regularly publishing lots of relevant, useful content compliant with your website’s niche topic and your target audience’s interests. This can include blog posts and related articles, photos, videos, music, games, discussions, and many other formats. The more target-specific high-quality content you produce, the more value users can get from it.

Narrow topics are also valuable in terms of uniqueness. If your content provides in-depth answers to a rare, but well-defined question, it can potentially bring more value than some short generalistic column, especially when it comes to the highest-paying industries. The more unique your content is, the more chances you have to grow a website and start getting profits faster.

See what content is restricted. Remember that choosing prohibited categories as the main topic for your content will most likely prevent your website from entering most monetization platforms and solutions. Such categories include, for instance, spyware or malware, pornography, illegal weapons and drugs, gambling, casinos, alcohol and tobacco, hate speech, and violence.

Assess the buyer's journey. Another important thing to consider is the buyer's journey. Of course, it is usually up to the advertiser to calculate these things, but understanding your audience as potential customers can significantly add up value to your digital assets without spending too much additional effort or resources. If the users are coming to your pages when they are about to finish their decision-making process regarding a purchase, such impressions will be considered more valuable to the potential advertisers. Product reviews or comparison services websites convert specifically well and typically have higher online ad rates.

Audience

As we already mentioned, data about your audience is one of the most valuable assets of your website, as it provides unique information regarding viewers’ interests, demographics, and behavior.

See what audiences you gather. Things like age, hobbies, or locations can provide advertisers with great insights regarding their online advertising campaigns and products’ performance (which is the key to growing a successful business and getting profits).

Thus, the more information you can provide about people who are about to encounter an ad, the higher the website ad prices you can expect.

Most marketers want to know exactly who they are targeting, so web advertising cost that they are willing to pay depends on available audience data. They want to know what kind of message this target audience persona is going to react to. If your audiences’ characteristics align with the advertisers’ typical client, you are likely to get a long-term partner with a higher ad rate.

Define their digital characteristics. Higher incomes, stronger purchase intent, or online shopping history make the user more desirable and valuable. Things like age, gender, and marital status can be also important for online advertising as they significantly help to narrow down the audience.

Determine their geo. One more thing to note is your visitors’ geo. Local advertisers would naturally prefer viewers from the same location, as getting their message to other people would be simply irrelevant. At the same time, traffic from some countries is considered more valuable than visitors from others. In general, users from English-speaking countries and those with higher spending power are getting much more attention from the advertisers, which in turn will affect your revenue.

Transparency

Inventory fraud is one of the main problems in today’s digital advertising industry for all sides of the equation. In fact, it takes $1 for each $3 spent on an ad. It is a reason why advertisers lost over $8 million globally in 2016. The situation gets even worse, as 56% of overall website traffic accounts for bots and botnets, which are constantly developing and evolving. This drastically affects both advertisers’ and publishers’ revenues, as it decreases ad viewability and prevents marketers from getting the real numbers of interactions with their ads.

That’s why don’t opt for suspiciously boosted web advertisement prices, choose only those platforms that have proven reputations and inventory that is protected from fraud. 

Privacy laws compliance

Today one should be extremely careful and dedicated to complying with all the rules regarding user information. The two key legislations with the most influence include GDPR for companies operating within the European Union and CCPA for California in the US. If your website has something to do with the residents of the aforementioned regions, please ensure your website’s data policies are GDPR or CCPA-compliant before gathering and utilizing any kind of user data.

On-page factors

Page design and navigation are among the core details for such an evaluation. Ideally, your website should look visually attractive and well-designed, with simple and structured navigation. Make sure the user experience is flawless and isn’t affected by latency and load time. Metrics like ad viewability and engagement rates can also greatly affect your ad slots’ performance and, thus, their value for potential buyers. Finally, every page on your website should be compatible with mobile and tablet devices without any disturbances on the end side.

Things to consider before calculating your website ad cost

Let’s review the essential details determining banner ads cost along with the cost of other popular formats. 

Most popular digital ad formats

Here are some of the most efficient digital ad formats for profitable monetization:

• Display banner ads — usually, it is a regular banner ad with an image and a short text with an offer or other message. Display banner ads are the most regular ads, but they are also among the cheapest and easiest to launch ($0.10 to $2.00 and higher for premium placements).
• Video ads — a simple and effective solution for more visual niches that require showcasing a product or service. This ad is slightly harder to deliver than a banner ad. It may be more expensive, but it can potentially bring much more value ($0.10 to $5.00 and higher).
• Native ads — native ads are well-known for their unique ability to mimic the environment they are in. Such properties make the ad unit less intrusive than a banner ad. Ad slots blend in with the actual content and cost for an advertiser from $0.20 to $2.00  per click and higher.
• Rich media — include vivid interactive elements. Such a unit is like a banner ad, but it also includes media. It makes sense to target a narrowly defined audience with a customized message in order to keep the user experience optimal. While website banner advertising rates are the most affordable, rich media units ensure better interactivity and engagement that translate into better performance for an advertiser. Their cost is from $0.50 to $5.00 per click and higher. 

Most popular ad sizes

Ad placements come in a variety of sizes that can also influence your website advertising cost, depending on your advertisers’ preferences. The more universal are your ad slots, the more advertisers can be interested in purchasing them, thus, you can charge advertisers higher. Therefore, it is best to opt for sizes that would be supported by most platforms and ad networks (like Google Display Network). However, you can also opt for a specific, less widely-used size for, let's say, banner ads, especially if your industry, website, or other factors demand so. Most universal sizes, according to the Google Display Network, include:

• IAB Medium Rectangle (300*250)
• IAB Mobile Leaderboard (300*50)
• IAB Leaderboard (728*90)
• IAB Wide Skyscraper (160*600)
• Billboard (970*250), etc.

Ads performance metrics that influence online advertising rates

Apart from your web pages themselves and their characteristics, there is one more thing that influences your online advertisement rate perhaps even more than anything else. This thing is ads performance, and it is the key set of metrics for most advertisers.

Fill rate

Let us start with the fill rate that defines how many ad placements are actually filled with ads once the user opens your web page. This is an extremely important metric for publishers, as it shows whether the website is leveraged to its full potential. Fill rate is the ratio between the number of successfully served impressions and the total number of requests for impressions.

Ad viewability

Ad viewability defines how many of the served impressions got real exposure to human viewers of the web page. It is calculated as the percentage of viewable impressions, which are defined by the industry standards for each size, among the total number of served ad impressions. The higher the pages’ ad viewability rates, the more expensive the website rates.

Reach

Reach stands for the number of unique visitors who encountered your message and interacted with it at least once throughout the campaign.

Click-through rate

Click-through rate is a metric that shows ad placements and creatives’ effectiveness. It is defined as a percentage of clicks on an ad from the overall number of users who encountered an ad. CTR is one of the most important factors that many publishers stick to when defining how much to charge for advertising on the website. High click-through rates also mean better rates.

Conversion rate

Conversion rate is the most general metric that shows how effective ad campaigns are, depending on the target action defined by the company’s goals. It is calculated as a ratio between the number of users that took the desired action to the total number of web page viewers. Higher conversion rates mean higher ROI both for the advertiser and publisher.

Most popular pricing models

You may ask yourself, how much do banner ads cost on websites? However, the first thing you need to do is define how exactly you are going to calculate the pricing — on a per-click basis or based on 1000 impressions (CPM).  There are many models, such as CPC, PPC, and CPM. Each of these has its own benefits and pitfalls.

CPM or Cost per mille

CPM cost per mille implies that the advertiser is charged for every 1000 impressions their ad receives. Cost per thousand impressions is a perfect option for medium and larger publishers with huge numbers of visitors, as they can easily provide the necessary number of impressions. From the advertisers’ point of view, there is no guarantee that the viewed ads will be clicked upon, so choosing the CPM cost per mille model can be more appropriate for brand awareness campaigns. The majority of programmatic platforms and Facebook Ads function according to the cost-per-thousand impressions model. 

CPC or Cost per click

As the name (cost per click) suggests, the advertiser is charged every time someone clicks on their ads, and the price may vary from $0.01 to over $10 per click. However, to charge $10 per click you need to have really high-standard traffic. Pay-per-click is a better option for smaller publishers, especially when they receive highly effective ad creatives that generate numerous clicks. On the other side, a click fraud prevention system is recommended, to protect advertisers’ interests and publishers’ trustworthiness. Facebook Ads offer cost per thousand impressions model as well as cost per click, plus you can find CPC campaigns on programmatic platforms. 

CPA or Cost per action

This is one of the broadest metrics, as cost per action includes all the desired actions set by the advertiser, and they are charged only once these actions are performed, even if an ad has already generated thousands of clicks and impressions. For instance, every time the user downloads the app, it is counted as cost per action. Advertisers are usually getting the most value out of these actions, so in this case, the advertiser pays more, as compared to other pricing models. According to the CPA calculation, one such action (e.g., a purchase) could be worth $50 or even more, even if you don’t have a lot of traffic yet.

Fixed price

Finally, the demand and the supply sides can always opt for a fixed website cost of online advertising, negotiated beforehand. In fact, this is how traditional advertising worked all these years before the introduction of programmatic advertising. Publishers and advertisers consider website metrics and ad performance and then set a fixed rate for a fixed number of impressions within some period. Such a model can be useful for a small business owner who wants to always predict and control ad budget.

Most online advertising platforms, like, let’s say, Facebook Ads or Google Display Network, support more than one pricing model. Thus, you can always experiment with CPM, CPC, or PPC Google and Facebook ads before settling for some regular business model.

How much should I charge for advertising on my website?

So far we have discussed lots of factors that can influence or even define online advertising rates for websites. We also learned about important definitions, metrics, and the most widely used ad placement characteristics. It is now time to gather it all together and finally answer the main question of every publisher: How much should I charge for advertising on my website? Here are the simple steps to get your personal benchmarks.

Step 1. Define your website’s “hot spots”. It is important that as many users as possible can see an ad and interact with it in order to get the maximum profits from this page. This is why we highly recommend examining your website metrics and finding the best-performing pages in order to calculate optimal website ad rates.

Then, you should consider an ideal ad placement quantity, format, size, and location. These will depend on your industry, preferences, and design — if done well, even a couple of strategically placed ad slots can drastically improve your finances. While experimenting on these details do not forget to optimize your online advertising for mobile and tablets for a smooth user experience.

Step 2. Check your industry benchmarks. Now that you know how many ad slots you are going to sell, it is time to calculate their value. A great way for this is to start with your industry benchmarks by comparing the current rates in your niche on the most popular platforms, search engines, and social media (Google, Bing, Facebook Ads, etc). Here is an example you might find useful, as it contains a click-through rate measured for the most popular industries, as well as the appropriate online advertising cost per click for Google, Bing, Facebook ads, and other platforms.

We can see that such online advertising industries as finance, real estate, B2B, insurance, dating & personals, as well as customer services, are the most expensive, while making money on travel and hospitality could become a real quest. Please also note that technology has the highest CTR of 0,84%, while the employment services industry is barely making it past 0,1%.

Step 3. Consider your CTR and page views per month. Once you’ve got your industry benchmarks, it is time to add up some more of your website metrics to the equation. Depending on the number of people who see your ads and click on them, your profits can vary greatly. Take a look at the tables below to compare how CTR and page visits can affect your earnings (data is taken from Taboola).

Pt.1

Pt.2

From these tables, one can observe that a website with 50,000 page views per month, $0.58 average cost per click, and 0,05% CTR will generate 25 clicks and result in 14,5$ from one ad placement monthly. If we increase the CTR to 0,44% we will get an almost 10 times increase — 220 clicks and $127,6 per month. Finally, increasing the number of page views will improve the situation, even more, resulting in $2552 monthly earnings from one ad placement.

When it comes to Facebook ads, the average ad cost per download (cost per action) reaches up to $5,47. Plus, it was revealed that typical small businesses spend about $10,000 per month on online advertising campaigns.  With this, web advertisement rates on Facebook grow like on every other platform, so it’s worth checking the rates regularly.

Step 4. Get to know your audience. When it comes to page views and traffic in general, it is always important to consider your audience and its value to the advertiser. The more precise data you have, the more you are going to get. Data from popular online advertising platforms like Google Ads or Facebook Ads might also serve you as benchmarks. Take a look at your traffic geography and try to align it with these average rates by country. You can notice that some countries give more expensive traffic than others due to higher purchase intents and levels of income, as well as bots and ad fraudsters.

Countries with the highest spending potential and English as a first language are also getting the highest CPC, over $0,3 for New Zealand and $0,61 for the United States. Nevertheless, the highest click-through rates are observed in Japan, the United Arab Emirates, and India, so both metrics are important for the calculation of the total website advertising prices.

Step 5. Testing. Once you compare the given metrics and apply them to your own website’s performance, you need to understand where this is all heading. Having benchmarks will help you better understand your approximate online advertisement rate, but in order to get precise numbers, we recommend making a test. Start with an average, based on the aforementioned factors, and move in the necessary direction until you find your ‘golden middle’.

Step 6. Putting it all together. As a result of this comprehensive analysis, you should now have some vision regarding your ad prices for each slot per month, per day, or even per year. You should also have an understanding of your web pages’ fill rates. Now that you sum all of your ad placements’ prices and take into consideration their fill rates you should eventually come up with the monthly income generated by display ads online. Of course, this number can vary depending on additional factors like seasonality or local events, but at least now you have your online advertisement rate and, what is more important, you fundamentally understand where it comes from.

Side note: In reality, each publisher has their own way of calculating website banner advertising or rates for other formats. Some prefer to focus on different metrics and their combinations, while others simply divide monthly viewers by 10 and charge advertisers monthly with this price... In this post, we tried to examine the most influential factors that influence website advertising prices and align them with industry and geographical averages to help you get a more or less realistic first outlook.

Eventually, you can always come up with your own method or formula that would perfectly fit your website’s and business specifics. But we hope that this article helped you to get some understanding so that you could gear a successful online advertising monetization strategy. 

Summary

Careful examination of your website metrics, as well as your niche average ad performance, should give you some clues regarding the potential profit your website can generate and website advertising costs that you can potentially gain.

Then, as soon as you are eligible to join a supply-side platform with a sufficient number of monthly visits, you can automatically connect to the myriads of global advertisers who will compete to serve ad impressions on your website in real-time bidding auctions. You can then experiment with ad sizes and formats, as well as different pricing models, and use real-time platform analytics to determine what brings the best performance for you.