I just had someone contact me inquiring as to the price of a box ad in my right-hand sidebar.  I have no idea what is a reasonable price.  What would be a reasonable amount?

Most advertisers interested in banner advertising are want to get eyeballs on their banner to improve brand recognition, and potentially increase conversions.  For this reason, they are primarily interested in traffic.  You may want to consider providing statistics from a stat tracking service such as Google Analytics.

Typically, the 125×125 banner ads fetch anywhere from 0.75-1.5 CPM.  Where your particular price point falls on that scale depends on a number of factors.  Will the ad appear above or below the fold?  How strong is your own brand?  How closely aligned is the product or service being advertised with your particular message?

The higher above the fold, the stronger your own brand, and the more aligned the product or service is with your own brand, the easier it will be to price banner ads at higher CPM factors.

How To Come Up with A Number

I’ve often had success shooting for somewhere in the middle of that range as a starting point. Let’s put some real numbers to this example.  You run a blog averaging 50,000 page views per month over the last 3-6 months.  Using that low-end CPM factor of 0.75 you could offer the spot for $37.50.  But, this particular ad would be at the very top of your sidebar, a prime piece of real estate on your blog.  Using the high-end factor of 1.5 CPM, the ad spot would run $75 per month.

Unless you are #1 in your particular niche, or receive a ton of traffic, it will probably be hard to land a deal at the top end of that CPM scale.  Settle for somewhere in the middle, maybe around 1.2 CPM ($60 per month, in this example) and be willing to negotiate if you receive a decent counter offer.

A final word about advertising.  New bloggers, or bloggers just beginning to receive interest from advertisers, have a tendency to sell themselves short in order to get that first deal in place.  Resist doing this, but remember not to be too proud of your brand either.  Look at the deal from an advertiser’s point of view.  Ask yourself what you would be willing to pay to place an ad for your blog on another site with identical statistics, clout, etc.  Keeping this perspective throughout the negotiation should help you arrive at a number that both you and the advertiser can agree on.

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