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Understanding internet advertising rates
We all know that it is very easy to earn money through online advertising but we do not know exactly how to compute internet advertising rates or how online advertising are quantified.
Most popular web sites offer their distinct internet advertising rates and there is almost no uniform rates to follow.
However, there are some existing accepted models to quantify online advertising. Here are some of the existing popular models.
Impression model
This is perhaps the most widely used and most commonly accepted model in online advertising. This model computes and monitor clicks per mile (CPM) or cost per thousand impressions when used in online advertising. It is also good for branding awareness.
As it implies, CPM computes rates based on the impressions. A basic infomation on the rate and volume of clicks is important. To give you a clear picture let’s say that your site is generating one million page impressions per month and your CPM was valued t .00, your expected revenue at the end of the month should be $1,000 (1,000,000/1,000 x $1 = $1,000). The type and quality of the traffic you get will determine your CPM rate. Popular search engines and web sites like Yahoo, Google, BBC, MSN, etc have higher rate due to the quality of visitors it attracts compared to the traffic generated by social networking sites.
Click through model
The approach of this model is focused on the perception that a quality or an interesting online ad will generate traffic by itself or people will actually “click” on it. This is usually used when the advertiser or the company wants to generate traffic back into its site. Internet advertising rates for this model is calculated by measuring click throughs, most commonly called CTR. Site owners will want a higher CTR for their advertisers because it will mean a higher income for them. Depending on the niche target of your site or how well targeted it is, will be the basis in computing the cost-per click. The ad relevance and the volume of the CTR will be greatly influenced by your niche target. One of the best sources of this model is the Google Adsense. Of course, the more expensive the product or service of the advertiser, the higher you can charge for the CPC or cost-per-click.
Cost per action model
This is a mover complicated system as the Cost per action model or CPA provides that advertisers can only pay if a certain action or event is satisfied under your agreement. Among those who use this model are new site subscriber, newsletter subscription, trial/download or sale. The industry which uses it will be the basis of the rate of the CPA. It’s like earning a commission under this model. When you are selling an e-book subscription, the CPA is higher as against selling a laptop.
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