How to set online advertising rates? Think supply and demand

Online publishers should set their ad rates according to supply and demand, says Deb Galant, founder of New Jersey-based Baristanet. “If you are sold out, you have to raise the price,” Galant said. “If you’re not sold out, lower the price.”

Baristanet, which has 50,000 unique visitors a month, charges a premium — $1,600 for its header and big box ads on the home page — and less for inside pages. “You’re not selling at great volume at those rates,” she said. “We are talking a few.”

As an example of how she makes adjustments, the rates for header ads on Baristanet’s Town pages were set at $800 but when she found out they weren’t selling, she lowered the price to $650.

Galant says she also sells the premium $1,600 ad spaces at a weekly rate of $450 week, which is perfect for advertising an event or other short-term customer needs.

They do work to accommodate those who need cheaper price points. The lowest-cost display ad is $100 a month, but the ad is required to run for three months and the salesperson is required to get the money in advance. Baristanet also offers an affordable classified advertising page, charging $20 a month for a 30-word ad. The money generated by classifieds isn’t a lot initially, but it “builds up over time, every once in a while I go into PayPal and there’s a thousand dollars.”

Asked if selling classifieds cannibalizes Baristanet’s regular ad space, “if that’s all the budget they have, it’s fine with me,” Galant said.

Baristanet started out with smaller advertising units but with a site redesign, created fewer, bigger ad units worth more money. “We went from a blog format to more of a magazine format, and the question was how do we create lower-cost advertising,” she said.

Galant’s salesperson is non-salaried but gets 20 percent of ad revenue. She is truly an advocate for the advertiser, Galant says, and is the highest paid employee on the staff..

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