The basics of internet advertising rates
We all know that it is very easy to earn money through online advertising but we do not know exactly how to compute internet advertising rates or how online advertising are quantified.
Most popular web sites offer their distinct internet advertising rates and there is almost no uniform rates to follow.
However, there are some existing accepted models to quantify online advertising. There are various models avaialble for computing advertising rates.
Impression model
This is perhaps the most widely used and most commonly accepted model in online advertising. Under this moder, the click per mile (CPM) or cost per thousand impressions when used in online advertising, will be monitored and computed. This can also be excellent for branding awareness campaign.
As it implies, CPM computes rates based on the impressions. You have to have a basic information on the rate and volume of clicks. To give you a clear picture let’s say that your site is generating one million page impressions per month and your CPM was valued t .00, your expected revenue at the end of the month should be $1,000 (1,000,000/1,000 x $1 = $1,000). The type and quality of the traffic you get will determine your CPM rate. Compratively, popular search engines and web sites like Yahoo, Google, MSN, etc will have higher advertising rates because of the quality of people visitinig their sites, as against social networking sites.
Click through model
The approach of this model is focused on the perception that a quality or an interesting online ad will generate traffic by itself or people will actually “click” on it. This is usually used when the advertiser or the company wants to generate traffic back into its site. Internet advertising rates for this model is calculated by measuring click throughs, most commonly called CTR. Site owners will want a higher CTR for their advertisers because it will mean a higher income for them. One way to compute the cost-per click is to determine how well your site is. The volume of the CTR and your ad relevance will have a major correlation with your niche target. The best example using this model is Google Adsense. Of course, the more expensive the product or service of the advertiser, the higher you can charge for the CPC or cost-per-click.
Cost per action model
This is a mover complicated system as the Cost per action model or CPA provides that advertisers can only pay if a certain action or event is satisfied under your agreement. New web site subscribers, newslettet subscription, trial/downloan or sites that focuses on selling, are using this type of model. The industry which uses it will be the basis of the rate of the CPA. This model allows you to earn some kind of commission. The CPA is higher when you are selling an e-book subscription compared to selling a laptop.
