How much is a reasonable monthly fee for a banner ad on the home page of a PR2 website that gets 2500 uniques a day?

Many of those visitors may not visit the home page, so also any idea what sort of fee would be reasonable for a site wide banner ad on such a site.

The company wanting the ad, sells products that relate to the sites content, so its very relevant and targetted for them.

I just have no idea whether I should ask for $5 a month, $20 a month, or more or less?

If anyone could give me any guidelines, so I dont sell it short, or on the other hand ask way too much.

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Cost for banner ads can be ballparked by using a CPM (cost per 1000 impressions) rate method. CPM rates vary but are usually in the $5 - $20 range. The reason for the range is due to how targeted the traffic is. Since you are saying your demographic fits the advertisers target audience, I would lean more toward the higher end of the spectrum.

Now impressions are based on page views not uniques, so you have much higher numbers to use for estimations here but if it were me, and I had just your unique visits to work with then take 2500 multiplied by 30 (since this is a monthly bid), divided by 1000 then multiplied by your CPM Rate ($20) ie: 2500 X 30 \ 1000 * 20 =$1500 per month.

That is what I would charge. Keep in mind, your page views are much higher then your unique visits so that price would be a very conservative price.

Hope that helps,
Dave
HTMLfx.com

It also depends on number of other ads and position of the ad slot, where the banner will be placed.
Less ads and more prominent position = higher CPM.

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Without knowing your or their site it would be hard to say, but if the sites are very relevant as you say, then go for $20 a month, if they don't like that deal then ask them what they think is fair, you can always drop the ad after a month, unless you offer them a deal for 6 mos or a year, but then you might end up getting screwed in the long run?

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Thanks everyone, I was quite shocked when I worked out the adwords cpm and read how to calculate such things.

The site in question, is the hair one in my sig and the site that wants to place the ad, sells hair products.

I was a bit of a wimp and wrote back to him, apologised for being new to what to charge for advertising and asked him what he had in mind.

What a cop out I know, but anyway, will see what he says.

Then I will see whether it is worth it, bearing in mind the adwords ads on the page proably have an effect. I also let him know he could place an ad there via adwords, but maybe he was hoping he could get it for less, which is fair enough.

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Hairstyles - Pictures of 2008 hairstyles and a virtual hairstyler demo.
Price Comparison Site - Compare prices of well known brands and products.