How Bloggers Should Set Advertising Rates
| by Jason | 49 Comments » | Blogging Tips
Indie films, indie music and now indie bloggers. That’s right, we are independent bloggers struggling to be discovered with very little resources. But that doesn’t mean you shouldn’t value your work or time. This article will suggest a new internet advertising pricing structure for bloggers that better fits the business of online advertising for bloggers.
Selling Advertising on a Blog
Have you been asked to sell a banner ad, widget, text link or contextual link on your website? Do you offer long-term contract discounts? You might offer these online advertising discounts because you have noticed ad agencies continually asking for them. They prefer to lock down 12-month terms for a bargain price.
Online Advertising Rates
Advertising prices are usually determined by several factors:
Google Page Rank
Unique Monthly Visitors
Page Views or Impressions
For many bloggers, these variables increase over time.
Monetizing a Blog
So why are you offering discounts, when you should be earning more money over time?
This is the question we need to ask ourselves. This is where you are selling yourself short when monetizing your blog. Someone looking to purchase an online advertisement on your website knows you will be charging more 3, 6 or 12 months into the future. Why? Because your traffic will have increased and therefore you will have increased your online advertising prices.
In the beginning stages of monetizing a blog, we feel excited to get our first advertising offer. This excitement often clouds our best business judgment. You will be asked to write free product reviews, giveaway free marketing items and run free contests so companies can build marketing lists.
You are being taken advantage of.
Why? Because you are an independent blogger, possibly desperate for exposure and excited about being noticed. If you are truly attempting to monetize your blog, you must approach this as a business, not a hobby.
There must always be a fair mutual benefit.
Try to avoid long-term advertising contracts. If you continually lock in 6-month or 12-month deals, you will loose a significant amount of money blogging. In the early stages, a blog grows rather quickly. If you are charging $10 for a text link now, you may be able to charge $30, 6 months from now. That’s $20 per month you lost on the tail end of that deal when you agreed to a 12-month contract at $10 per month.
Long-term discount pricing is not applicable.
Anticipate traffic growth, anticipate success.
The following is an example of a more sensible blog advertising price structure:
Current 1-Month Ad Price: $60 per month
1-3 Month Contracts: $60 / month
4-6 Month Contracts: $65 / month
7-9 Month Contracts: $70 / month
10-12 Month Contracts: $75 / month
Online Advertising Negotiations
Remember, you are always negotiating and each party is trying to do what’s best for them. You must become a strong negotiator, which means feeling confident with your online advertising pricing and what your blog is worth. You will receive many different responses from ad clients:
Your pricing structure doesn’t fit our budget.
Response: I understand, please keep us in mind when you have a client that can benefit from our site.
I think your pricing structure is very strange and I’m not sure my client will go for it.
Response: Our ad price structure is appropriate for the blogging community and we hope you can see the benefit our increased future growth will provide your client.
We can get similar opportunities on sites of higher PR and traffic for less money.
Response: Our price points are based on demand and traffic performance. We hope that you see the benefit of advertising with us.
Elevate Blogging Industry Together
In order for all independent bloggers to benefit, we must be steadfast in believing we shouldn’t work for free. Our time is valuable and your audience is loyal. Ad clients are beginning to see the benefit of working with independent bloggers, or they wouldn’t be emailing us ad offers. If we all put a fair price on our time and blog then we can shape the expectations of doing business with us.
You may also enjoy reading… Can Blogging Pay for My Travel?
Never promote for free, you are hurting yourself and your blogging community.
Related Posts
Written by Jason
Co-founder of TwoBackpackers.com. Jason has been traveling, writing, taking photos and creating adventure videos since 2024, when he departed on his first year long travel backpacking journey. Jason is a full-time blogger and social marketing guru trying to find the way. Visit my website
49 Responses to “How Bloggers Should Set Advertising Rates”
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You have made some excellent points here. Monetizing a blog is a challenge. If our goal is monetize, then we have to stop giving ourselves away. Thanks for posting this.
And that’s the most important thing to take away from this article Nancy. We can’t be working for free if you are indeed monetizing your blog.
Thanks for this. This piece has always been a mystery to me. Nice post.
Jason
Thanks for this post, really useful! We were never sure how to respond to advertisement enquiries and had no idea what rates would be appropriate, so this really really helps.
I think you’re right, in principle.
Discounts for longer periods aren’t really done because of the length of period though, they’re done for securing a longer term commitment. And hopefully a higher overall revenue with less work.
Same principle as was around with print magazine, where a series of ads over time cost significantly less than a one-off.
Noticed you didn’t say anything about your success with the above approach, that’s what I’d like to know more about. If it works, I’m more than happy to try it!
That’s a good point Jack. Long-term contracts are less work for both parties, and it’s nice to have that fixed income coming in every month. Personally, I try to weigh those benefits with what I think I may be losing in potential future revenue. But, it’s a gamble in the end. You have to be confident that you will keep getting advertisers knocking on your door.
Is it working for me? Well, that’s also hard to say. I don’t know how much money I would be making if I didn’t use graduated rates. I do admit I lose a lot of business this way, but I am committed to changing the traditional price structure. I have succeeded in some cases and failed in others, but I have chosen to do business this way 100% of the time. For this reason, I don’t have many long term contracts, but I am okay with that. I put in the extra monthly work and I am hitting my monetary goals… for now. It’s hard to try to change the way we have always done business.
I like the suggested responses you gave for advertisers. The first few inquiries you get as a blogger ARE exciting. I still get excited 4 years later too. It’s important to have a range of rates you’re OK with. Start high enough to allow room to negotiate, and don’t be afraid to let advertisers with an insufficient budget pass you by. If a few found you, more will follow if you keep doing the same things (writing, social media, link building, etc).
Great post for an excited newbie like me! Although I’m not new to journalism, I am to blogging and going freelance and I completely agree that we should be paid and recognised for our work – Not only for us but for the blogging community.
Are you able to give me an example of stats that advertisers like to see? Eg. What are a marketable UB, Page View, Google Rank statistics?
Thanks for your help!
Chloe, welcome to the blogging world. When you decide to market yourself is really up to you. Some wait 6 months until they gain a Google PR rank of 2 or higher, while others begin right away. And there are many different options for monetizing your blog, including affiliate sales. The variables I mentioned in the article determine what rates you might be able to earn, but when you begin to market is really up to you.
As far as what you can charge based on the variables. It’s also not so concrete. You may have a high PR, but a few visitors. It’s a constant game you must play to see what you can get. I began to get link builders contacting me after I reached a PR of 2 or 3 and had 6,000 unique visitors. Prior to that it was only affiliate sales.
I like the way you think Jason..the graduated monthly link payment structure is fantastic..
I have many clients that give me a budget, and want me to come back with packages, so month to month links often times are not in the budget.
Negotiating is not a bad word.
I think most are looking for long-term deals, but it’s important we factor in our growth and not short sell ourselves for a year long contract.
Really solid advice. Unfortunately I made the mistake of locking into a low price early on and now am stuck with being underpaid but it’s a learning curve I guess
It’s okay, we all do it initially.
Thanks for this Jason. The blogger chant -
“we shouldn’t work for free.”
Repeat after me, (and Jason)
“we shouldn’t work for free!”
Great Advice Jason. I have started to get a few inquiries every now and then. Some of them have worked fine, orthers haven’t, mostly based on my inexperience on how this “ad/link” business runs. I find interesting your long term pricing structure, and it makes all the sense in the world since you are looking forward on profiting on your expected growth. I wonder how clients might perceive that perspective.
My blog has been up for 6 months already but I still have a PR of 0 (come on Google… give me some love!)… so, I hope that as soon as the PR gets updated I can tap on more ads opportunities
Awesome advice!!! We definitely shouldn’t give away our services for free.
Great tips, Jason! I agree that we bloggers need to work hard not to get taken advantage of!
Great Advice.
My blog is fairly new… I’ve already started to get people wanting links, for me to write a review on their website, or tell my readers about their service… blah blah blah. Funny when I send them to my advertising page, I don’t ever hear anything back. haha.
My work isn’t free and I refuse to compromise my readers.
I don’t 100% agree with your take. Your article is an argument against very long term contracts (and maybe this is 12 months or longer) but the assurance of a steady income each month (you don’t need to re-sell the ad link every month) and the effort to collect the money (make sure it is paid etc, supply an invoice etc etc) makes a discountfor a longer period more sensible in my eyes. Maybe the amount of the discount should be weighed up however. The early advertisers also start to help build up your clientele (you will develop rates cards, standard email responses, web structures for your ads etc) which encourages advertisers as they can see that a few have taken up the offer already (and therefore you are probably reasonable to deal with, trustworthy etc etc). There is a balance on both sides with advertising in my humble opinion. Interesting and well-written and thought-provoking article. Thank you.
Mark, you are absolutely right about there being a benefit with 12-month contracts. It’s less work, and provides more financial security. And for a mature blog that has hit a plateau, rates won’t be increasing as fast as a new blog’s rates. I am not against 12-month contracts, I just want to be sure I get paid a fair price. And that fair price takes into account, my future increased traffic.
Hey guys!
Very good points – makes me wish I’d read this before negotiating with some advertisers on my own travel blog.
Your timing makes me think the article may have been somewhat motivated by my email about the possibility of reviewing our travel app. To set my side of the story straight, I wanted to make the point that the intention behind the email was more like a press release than a request for free advertising – I may be biased, of course, but news on an app like that would be intrinsically valuable to me as a traveller, so I theorised that spreading the news had the potential to be mutually beneficial.
It’s all grey-area, of course, and which side one comes down on is entirely dependent on the individual, and this I can totally respect and understand.
Keep up the good work!
Hey Michael, no worries, I promise this article was not inspired by your email. As an independent travel blogger, you need market your product and network, trying to get as much free exposure as possible. I would have done exactly what you did, hoping that some people would promote the product for me.
I have decided that we won’t do any free marketing or promotion based on the unbelievable number of requests we get to do it. If there is an affiliate program tied to it, then I consider it, because the investment of my time is being paid for, hopefully. But, again, as someone selling a product, it’s their job to try to sell it. It’s my job to try to get them to pay me for my time. It’s normal business practice, that hasn’t yet become normal in the blogging world, but we are working on it. Good luck with your project!
Great article. I agree. I recently knocked back a 12 month deal as they wouldn’t budge on price nor go for a monthly contract. I said i anticipate my traffic growing…
Cheers
Congratulations Lachlan, that’s what we need to be doing. It’s a tough choice, but we can benefit in the end.
Thanks for the great advice! I just started blogging and this kind of real, raw information is invaluable.
I would offer a cheaper monthly price for a 12-month contract.
I’d rather have the security of an upfront payment from a good customer for 12-months, than concern myself with renewals.
I see where you’re coming from, but for me it wouldn’t work out. Like most things in this world, the more you’re prepared to pay upfront, the better the deal.
Traffic growth is a fair point, but as long as you don’t sell too cheaply I think the investment from advertisers will be one of the things that drives a site’s success anyway.
Thanks for this post! I have had my blog for over a year and want to get started with advertising but had no idea where to start. I’m looking forward to reading more of your blog!
Glad we could help Joya. I think it helps us to discuss monetizing our blogs openly, sharing ideas so we can all benefit.
Fantastic information. I am just starting out, am totally clueless but hoping build an online income over the next 18 months so we can travel the world with our little one. I’m so grateful to find a site that discusses the how-tos. Thanks so much Jason! (Feeling a bit depressed at disocvering your site though, it looks fantastic and very informative, which shows me how much work I have ahead of me.)
It is an incredible amount of work, but like many challenging goals, it’s always possible. rtwdave and NomadicMatt, both top travel bloggers, have shared their earnings and it’s never from 1 travel blog website and its never from just blogging. I will write our next article on this. Blogging is simply a launch enabler for other products.
Thanks again Jason! My adoring fan feelings just tripled!
This is truly excellent advice. Especially when there are so many bloggers in this niche selling advertising for next to nothing, which makes it vastly more difficult for all of us to make a living.
Communication like this between big travel bloggers is truly needed, thanks for opening up this dialog.
Discounts for longer term contracts are a standard and I’m not surprised you’ve had advertisers walk away. Assumming the ad placement doesnt require ongoing work then, broadly speaking, the first month covers “your effort” and the rest is money for nothing. Essentially in expecting an advertiser to pay a premium for a longterm contract is akin to having your cake and eating it too.
I think we each have to apply business principles that we feel comfortable with. I am not comfortable with being content just because something is considered the standard. I wouldn’t be running a blog if I did. There are benefits to both approaches on pricing. To me, the rest is not money for nothing. An advertiser books with a blogger based on their “performance”. The pay is often determined by that performance. I continue to work hard every week to improve my blog’s performance. If our performance increases I charge more. I like to compare it to a professional athlete. If a player is hot and there are high expectations a 7-year contract might look like this:
Annual base salary – $10 million (2011), $13 million (2012), $16 million (2013), $20 million (2014), $21 million (2015), $21 million (2016), $21 million (2017). In addition there are bonus incentives for milestone performances.
My expectations are that my website’s performance will continue to grow, providing greater benefit to an advertiser over the length of the contract. I view it in terms of months instead of years. In my opinion they should pay for that expected increased performance. If they aren’t willing to pay for the increased cost, then we just stick to month to month deals, which are not too challenging for me to manage considering this blog is still small. Booking a long term contract at a cost that might bite you in the butt later can be frustrating.
My goal with this article is to offer people another alternative to pricing structures. They can ultimately make the decision themselves concerning what works best for them, but I don’t think we can just sweep it under the bed because it’s not a standard today.
Sure, I’m all for bucking the standard if you can get it to work for you. It’s worth noting though, that to a lot of paid link buyers, your traffic is actually irrelevant (they’re just buying PR in an attempt to game Google), so your idea that higher traffic brings more traffic to their site isn’t even entering into their buying strategy. If a link buyer isn’t willing to have their links marked as “nofollow” then all they’re after is PR and you’re likely wearing a Google penalty for selling the links – but that’s a topic for a whole other post!
You are right Stuart, text links are primarily based on PR, but I include PR as part of my blog’s increased performance. For many just starting out your PR can increase dramatically in the first year, as did mine. That’s where I am glad I didn’t lock in year long text link contracts at a price fit for a PR of 2. I still understand your opinion, but I think my strategy still warrants to be shared with everyone as an alternative option.
I never received any advertizing offer, but sometimes I thought about it, and in case I got one I wouldn’t know how much to charge.
Thank you!
I will keep your suggestions in mind
Hey, thanks for this – we were just discussing this the other day! We’ve had quite a few emails requesting advertising space over the last few months but at the moment we’re not quite ready for that . We’ve got a few developments that need done to the blog first so we’ve just had to say that advertising isn’t available ‘yet’! But we’ve been racking our brains as to how much to charge when the time comes in order for both parties to be satified. It’s all very exciting and I’m looking forward to getting to the point where we are properly up and running!
Aisleen, I think it is a great idea to get prepared for advertising before you actually do it. Work on a Sales page and where you will be willing to place links. This way you can speak confidently with potential advertisers.
Thanks Jason,
It’s all quite daunting at the moment, but I’m sure we’ll get there in
the end!
Interesting ideas, though I’m not sure I agree that it’s a viable option. With any long term commitment a buyer should be getting a discount – and from the bloggers point of view, it’s good to know you’ve got 12 months committed and paid up front, even if slightly less than your advertised rate.
Matt, I agree, it’s really about what is important to you. If having that 12 year commitment is good, then a discount makes sense. I am am okay without long-term deals, as long as I feel as though I am maximizing my revenue. But, honestly, it’s something I will never be able to measure.
Yes, Yes, YES!!! I so agree with principle behind this.By valuing our product and our service and charging appropriately we are serving ourselves and our fellow bloggers. I won’t rant here – I’ve done it before but – everyone should read this article.
It’s most important that we do value ourselves. This will help us all.
Been a while ignoring this issue, as thinking & discussing too much about “Monetizing your Blog” made Blogging is no more fun, for me, PERSONALLY! But am always open for any new things & glad more Bloggers sharing very useful info on this matter. Thanks! Cheers from Bali!
That is the fear with anything that you love. Once it becomes your way of living, once it becomes your source of income, it ultimately becomes just a job. Today, blogging is my job. I have to make money blogging in order to pay the bills. And that has changed things a bit, as I would expect it to. Find what works best for you, without ruining something you love. Yes, blogging is my job, but I still enjoy it.
Great post Jason. I can see why you’re doing this too. I suspect that a number of the not-so-ranked bloggers start accepting rock bottom deals from the advertisers (especially direct offers), it’s killing the industry and driving the prices down. Just my 2 cents.
Yes, I believe that is happening. And since posting this we have also decided to make our rates public, in order to provide a benchmark for newer bloggers.
Really useful article guys! Keep it up – you’re an inspiration to many travel bloggers out there