E-Media Strategist: 9 Tips for Optimizing Your Online Ad Pricing
Now, here's the tough part to swallow: An advertiser doesn't care how many people you sent the e-mail to. They care about how many people actually see their ad. In this case, with a circ base of 25,000, 5,000 people opened the e-mail and saw the ad. Let's assume the advertiser purchased the large, primary ad position in the newsletter. With an ad rate of $1,500, the effective CPM is $300—three times that of print. Something's wrong.
For websites, most publishers like to tout their overall Web metrics like unique visitors and page views per month. Guess what? Your total website traffic doesn't matter. Most publishers rotate multiple advertisers in the same position, so what matters is how many times each ad is seen (i.e., impressions). Let's assume the website has 90,000 page views per month and that we rotate three advertisers in the top leaderboard position, giving each 30,000 impressions per month. The rate is $1,500, which results in an effective CPM of $50—half that of print and 1/6 that of e-mail. Again, something's wrong.
An Optimal Pricing Strategy
Now let's take a look at how we might better optimize the pricing across media. (See the bottom set of charts on page 13.)
To achieve comparable CPM on e-mail newsletters, we would drop the ad rate to $500. Again, remember that you're really only reaching 5,000 people with the ad, so this is a reasonable rate.
For Web, we would take a different approach. If we were to achieve a comparable CPM for 30,000 impressions, our ad rate would have doubled to $3,000. That probably would scare off advertisers because it sounds so high. Instead, to achieve a comparable CPM, we can halve the number of impressions per advertiser, but this also means we can now sell twice as many people into this position each month.