Advertising Rates

Before you can work out how much money your site will make, you have to understand the different types of advertising rates. Unfortunately for you, the advertisers decide the way in which you will be paid for delivering their ads. Although you cannot change how they pay you, it is worth knowing the advantages and disadvantages of each type of advertising rate.


What it looks like

How Online Ads Generate Revenue


Advertising Rate Advice for Site Owners

Online advertising campaigns pay mainly in one of three ways:

  • CPM is the best deal for you the publisher. It stands for cost per thousand ad impressions (the M is the roman numeral M which means 1,000). This means that you get paid for every 1,000 times an ad is shown regardless of how it performs. It is the best deal for you because you get paid simply for existing!
  • CPC (also sometimes called PPC) is the payment type you will mostly receive when your site is new/small. It stands for cost per click which means that you get paid every time someone clicks on your ad. If you have CPC campaigns on your site which perform well, you can earn good money from them. Mostly CPC campaigns are inconsistent as a source of revenue however, so CPM campaigns should be given preference over them.
  • CPA is the best deal for the advertiser. It stands for cost per acquisition (or action). This means you get paid if a user buys/does something after seeing/clicking on an ad on your site. It’s very difficult for you to make money out of CPA campaigns unless you have a dedicated team optimising the campaign, so only accept these deals if you have a good ad network in place doing the work (like AdSense for example).


eCPM makes it all make sense

eCPM stands for effective cost per thousand ad impressions. It is the most useful calculation you need to know, as it is the only true measure of how well your ad network is doing for you. It is what the CPM would be if you were paid exclusively on a CPM basis for all your ad campaigns (ie how much is being paid on average for every 1,000 ad impressions from your site).

If you are using multiple ad networks (see Advanced Setup) and you want to know which one is performing the best for you, but they are all paying you on a variety of different payment models then you can compare their eCPM. To work out the eCPM you multiply the money you earned by 1,000 and divide that by the number of ad impressions that were used up. If you like equations, here you go: The eCPM equation is basically the same as CPM:


eCPM Formula or EquationClick to enlarge

eCPM = (Ad Spend x 1000) ÷ Ad impressions


Top Tips

Out of the three standard ad units – you can usually expect the most out of the 300×250 or the 728×90. Strangely, the internet seems to have several pages on it claiming the 160×600 makes the most money, but this assertion does not seem to be substantiated.

When you are a small to medium site.
You should hope to be earning about £0.20 – £0.60 eCPM after a month or so. This figure will improve over time as your ad network gets better at selling your site. As each site is different it’s impossible to say how much you will make, so you’ll have to wait and see how much revenue your site can bring in before trying to improve on it. Three months should be enough time to work out your base level of earnings.

When you are a large site  (over 1,000,000 ad impressions per month)
Large sites should get an eCPM of £3-£6 on average. This is for all inventory combined (including that which you don’t sell). It also includes revenue from both brand and remnant networks you are working with.

This eCPM range is pretty respectable, although many sites go much higher than this. On top of this, if your site is this large there are many other ways you can make money from it.



Advertising Rate Definition


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