How do I make money from my homepage? How can I sell banner ads? How do I get started in online advertising?
On the surface these all seem like simple questions. The reality though is that there are a whole range of options out there available to you. No single one is the correct answer. Let's simplify things a little bit by assuming you have one banner ad per page on each page of your site.
There are essentially four ways to sell advertising on your site:
1. Flat Rate – The advertiser pays you flat rate to display their advertising on your site for a certain period of time.
2. CPM – Cost Per Thousand. The advertiser pays you a certain rate for every 1,000 ad impressions.
3. CPC – Cost Per Click. The advertiser pays you a fee every time a user click on one of their advertisements.
4. CPA – Cost Per Acquisition or Cost Per Action. The advertiser pays you a fee every time a user click on their ad and continues onto their site and performs an agreed upon action. This may be purchasing a product, registering for a newsletter, or any other action that has value to the advertiser.
Regardless of how you choose to sell ads on your site, the way you will track the value of each ad unit will be by calculating your effective CPM. If you sold your banner ads on a flat rate basis for $1,000 and served 100,000 pages, your effective CPM for that ad unit is $1,000/100 (since CPM is per THOUSAND page views) = $10 CPM. If you sold your ads on a CPC basis and got 200 clicks at $0.25 each or $50, your effective CPM is now $50/100 = $0.50 CPM.
As a publisher, your goal is to maximize the value you receive from each web page of your site. This value is called the RPM or Revenue Per Thousand Page Views. RPM is the basic metric online advertising operations executives use to gauge the health of their ad sales.
"RPM is the basic metric online advertising operations executives use to gauge the health of their ad sales".
To calculate RPM you add up the effective CPM of each ad unit on a page. For instance, if you had three ad units on a page selling for $3, $5, and $10 effective CPM's, then your RPM would be 3 + 5 + 10 =$18 RPM. Another way to calculate RPM is to take the total dollars earned from your site and divide by the number of page views. For instance if you know you made $5,000 in one month and displayed 100,000 page views, your site wide RPM is $50.
We increase RPM over time by selling a variety of ad types and using a variety of targeting criteria. To get started, first you must attempt to establish an RPM floor for your site. This serves as the minimum amount you expect to earn from your site.
Author By :Fritz Rollins
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