Pricing ad space on a startup
Hello there I am building a travel website that will be launched in early 2013. I hope that it will become a major player in providing customers with travel ideas and inspiration and thus compete alongside the likes of Trip Advisor, Lonely planet among others, at least that is the aspiration. While we are some many miles from that achievement, in the interim I need to set advertising prices. But how can I do this when I cannot determine the amount of traffic coming to the website. Should I wait for traffic to grow first before offering up ad space, or settle on an intermediary pricing structure? If so, how best to determine that pricing structure? Any thoughts?
Hi Paul, different publishers often take a different stance when it comes to monetizing their website with ads when traffic is still low. For me, as long as you don’t think ads will spoil the usability of your website, you should go for it.
As for the pricing, you can check out marketplaces like http://www.buysellads.com. Find out websites that are similar to yours in terms of topics and traffic levels. Check how much their ad spaces are selling for and whether they are selling well. This should give you an idea.
Best of luck,
http://www.SproutGeek.com - The #1 Online Publication for Startup Entrepreneurs
Look at it from an advertisers point of view.
They will want to know ( a) who is visiting, (b) why and (c) how many
Whilst you may know the first two, you wont know the third, so you will be unable to offer any sort of fixed price adverts to start with, moreover you will have limited credibility in terms of charging on a PPC basis.
if it was me I would just get someone else to do all the hard work for you – ie use an middle man such as Google to place the adverts on a PPC basis. Later on once you get volume and other data you can deal direct with advertisers yourself. This tends to be only for an established player, and you may well find potential advertisers approach you…
I hope that helps.
James Smith [i]Chartered Accountant[/i] www.jamesesmith.co.uk --------------------------- Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT
Thank you both for your responses, the combination of which have given me a refreshed view on my advertising approach.
Wayne – the website link you gave me appears to cover a number of businesses in the travel industry that are based in the US. Do you know of an equivalent version for UK based businesses?
James – I agree with your thoughts on PPC, but know that we will have difficulty in using an agent like google given our unique approach to ad space
Google ads will be an easy way for you to get information about advertisers in the interim. With low traffic numbers and unknown click through rates, you’re going to have a tough time finding buyers for your advertising spaces. Google will handle all that for you, leaving you with more time and money to build up your traffic.
Another benefit from Google ads which I’ve discovered in the past is, you can see which ads are making you the most money. Once you work out which ads are performing the best, you can then try and sort out deals with those advertisers directly, giving you a bigger piece of the pie.
You’ve said it might not be ideal for you, given your approach but it may be of benefit to give it a go in the short run