Even though it is very important to price your advertising formats correctly, it should all come down to one major factor – what are you offering of value and what will advertisers be prepared to pay?

Of course, you know the marketplace you are in, but do you really know how much value advertisers are attaching to your product? If you don’t know, ask! – it really is SO important to remind yourselves that ‘value’ is what it all comes down to. If you offer value, then you can at least charge something for the advertising space!

So, what type of product do you offer and more importantly, what kind of customers will buy from you?

If you run a website, which attracts 20,000 consumer visitors per month and your site is all about mobile phones, then you’ll probably be restricted in the overall scale of advertising fees. Why? Well, there are a lot of mobile phone websites out there, which are doing a similar job and may attract around the same amount of visitors within the same age group, demographics and buying habits. In this case, you’ll probably charge the going rate and hope your revenue increases, as your visitor numbers and popularity do.

Now, let’s have a look at the other end of the scale.

You own a website with thousands of pages, which attracts over 300,000 of the worlds richest people. It is a very high quality product and you have a vast number of customers who pay a large annual fee to access exclusive luxury offers from big spending advertisers.

Is this scenario unrealistic and a little over the top? Well, yes probably. However, I think you can see where I am going with this.

Remember, as long as you are offering something of real value to a relevant audience, you can charge what your product is worth to your potential advertisers.

So, what is the going rate? Well, this is quite tough to gauge, as it really does depend on many factors.

I chat to a lot of publishers and media owners in a consulting role and a high proportion of them don’t have any idea what to charge. Then I ask them three main questions:

1. Does your product offer value?
2. Is there a lot of competition for your product?
3. How much would you pay to advertise in it?

The reason I ask them how much they would pay, is to get them in the mindset of the buyer – when they think of a price, they automatically think of value and they are usually honest with their answers. Then, I will break it down and offer advice on what I believe to be a fair price for the product.

If you offer website advertising, then you have to decide whether you are going to charge by a cost per thousand impression method or by a set price. Then you have to decide if your ads are going to rotate, or have the added value of being the only ads (solus position) on that particular section. Offering solus ads is probably the best solution for the client, but you have to make sure that exclusivity does not lose you money. Remember, 10 different ads rotating on a section with 100,000 impressions is probably going to make you more from 10 different advertisers, than it would if one advertiser took all 100,000 impressions. However, if you are fortunate enough to get one advertiser to pay for all 100,000 impressions, then go for it.

In my experience the advertisers who wants to reach more of a consumer audience will be looking for higher impressions. Then, it’s the B2B market that is more willing to take fewer impressions, but pay a higher cost per thousand for them. Of course, this depends a lot on your site and the overall content and target market.

A general rule of thumb for web ads is anything from £5 ($10) to £100 ($200) per thousand page impressions, depending on the target audience and the type of site. If you want to charge on a set price basis, then you can do this by working out how many impressions a page or section gets per month and price it on a monthly basis using the cost per thousand pricing structure. So if you want to charge £50 per thousand impressions and a section gets 10,000 impressions per month, you can sell that slot for around £500 per month.

An important point about comparing prices to other media:

I always question the thought process of online publishers, when they offer ridiculously low prices; based on the fact that traditional media is seen as being a lot more expensive than online media. They also feel the need to be able to answer any objection with a lower price option and this can be a big mistake.

It all goes back to the original question – what would you pay for the advertising? Forget about comparing traditional magazines and other media with online advertising – they are completely different and have their own advantages.

A lot of people have the idea that magazines are for brand awareness and online ads are for real enquires. Well, I believe this is true in many B2B markets, but it is worth mentioning that more and more people are reading material, seeing an advert and then going online to get more information.

So, in conclusion – I think that a lot of advertisers are still using a selection of different media formats and you should sell online advertising in a very different way.

Work from home opportunities abound on the web and offline from the internet. You can sell or advertise any product imaginable. You can build your individual merchandise or sell other people’s products. It is not a concern what you promote, but the cost point will change into a topic sooner or later. Even sooner than you select a make money working from home business, you’ll want to recognize the cost point of the potential products.

When taking a look at a price point there are several pieces to have in mind. First of all what price will the marketplace handle. Second, how much is the value to supply a sale on your item. Third, how does the manufacturing cost figure in to the equation. Fourth, do you have an option of the cost element or is it set for you. Fifth, are you able to offer incentives for any person to purchase your product.

The first consideration is what value will the market handle. Without going into debt trying to find accurate research you must do a little impromptu trying out of several value issues to find which one is best. If you are selling online you must arrange more than a few accounts, blogs, or web pages and offer quite a lot of pricing choices to test and spot which one garners the most sales. You can also ask your mates and friends what value they might be prepared to pay for the item. This will give you a better concept via some reasonably priced research of how much to charge.

The second consideration is how much does it cost to produce a sale of the item. What dollar figure have you ever spent looking to get one sale? Many occasions that is a tricky question to answer as a result of the various promoting methods you can be using. You need to check out and give a best possible guess, especially if you aren’t the one setting the pricing structure. You will need to recognize where your benefit margin shall be as that’s the dollar figure when considering the product and the price of manufacturing and promoting the product.

The third consideration is what is the price to manufacture the product. If you’re selling merchandise for anybody else you might be given permission to skip this paragraph. If you’re the one making the product as well as promoting it, it is very important to consider all of the costs of producing the product. Make an effort to add in any sales tax or delivery costs as actual costs for the price of the parts for the product you’re making. Many occasions small costs are overlooked but can mount up quickly if they are not introduced into the picture.

The fourth consideration is whether or not you are the one setting the price point or not. If you are selling products for someone else then you will need to evaluate the cost they are charging against the amount you have to put into it to make a sale. If you cannot raise the price then you will have to manage your profit margin on your own. This component is huge because you can quickly get to a point where you will not make a profit or will make a small profit because you have not calculated all of the costs into your price.

The 5th attention in making your price element is whether or not the price element allows you to offer incentives for other folks pay for your product or service. Can you offer a coupon code or an add-on product to the client to entice them to shop for your item and still keep your benefit margin. You will notice that this particular consideration will take all the prices that you’ve got prior to now, figuring and adjusting them with the price that you have set to make a profit.

Lastly, the fee element of your services or products might not be within your control. Your advertising prices are within your control so remember to cope with these costs smartly so as to make a steady benefit at whatever you are selling.