How Much Should I Charge For Advertising On My Site?

Published by on October 7, 2008

So this is one of the first issues we had to address on Grooveshark. How much should we charge for advertising?

Should we set a really high price and hope somebody bites? What about a really low price, so we can guarantee we have advertisers. Well the truth is, …it depends.

Advertising Is Only As Valuable As Your Ability to Sell It

Right now on your site, you could be receiving $.01 per click on your site. Or you could be selling your ad space for well over $50,000. It all depends on your ability to sell the advertising. As soon as you sell one ad, you have an immediate starting point for how much to charge your next advertiser.

Say you’re trying to sell clicks on the site. Facebook charges about $.50 per click, so depending on how you justify it, you should be able to get somewhere between $.30 and $.60 per click on YOUR site.

I like to tell people how much they’re paying elsewhere, and give them something of value. The goal being to bring them on as partners, and create a relationship.

Advertising Is Not a Zero-Sum Game

Don’t plan to break the bank on your first ad sale. First of all, you’re probably going to under-deliver for yourself. You could have gotten more money out of clients, longer-terms, etc. but you didn’t.

So you have to focus on building a relationship wherein on the renewal you can get a bigger, longer contract, and where you both win. Your client knows they won on the first purchase, and it’s okay if you win on the second.

How Much Are You Charging?

How much are you charging for advertising on your site? Are you getting any takers? What techniques do you have for selling ad space?