How to Create a Banner Ad Revenue Estimate

Does your Web site make you money? Turn off your order-entry system. Now does it? Well, it should. Web page banner ads have been around since the start of the Internet and the number of people using them continues to grow. They're a great way to earn your company extra revenue. How much, you say? It depends only on several factors such as Web banner ad specs (e.g., size), your Web site traffic and how targeted your audience is. No, you don't have to know how to create a banner ad that works. You just need a Web site. Join Big Picture Web today as we estimate how much extra income you could make with banner ads.

How to Create a Banner Ad

Oops. Wrong topic. We're not going to learn how to create a banner ad. Others have done that. WorkZ posted a great starter piece on how to sell banner ads on your site. Web Marketing Today also did a great intro on banner ads. Head over there if you need help on how to create a banner ad program. Today, we're here simply to gauge opportunity. What could we be making if we had banner ads that work to make us income just by being there?

Banner Ads that Work to Make You Income

(click to access the spreadsheet)How to create a banner ad vision of the future? Banner ads that work for you? I've created this Google Docs Banner Ads Revenue Estimator to assist us today. (You'll need a free Google Docs account). It's a spreadsheet with much of the math already done so we only have to focus on just a few things. If you love it, be sure to get additional free tools like this in the future by joining Big Picture Web's mailing list (There's a sign-up box in the right margin). Now then, let's begin.

Money on the Web. Banner Ad Specs

Remember, we're not here to learn how to create a banner ad or discuss web banner ad specs. We're really only going to learn enough to answer four questions:

1. How many monthly page views make up your banner ad real estate? Much of banner ad math involves these page views, or impressions. Certain Web banner ad specs may not allow you to display an ad on every Web page. Furthermore, you may have some banner ads that work particularly well only on certain product category pages. Locate the exact pages on which you wish to advertise and then track down the monthly impressions in your Web Analytics software.
2. How many ad slots do you have? Do you only have room for a super tall "vertical skyscraper" in the margin or is there room for an 4x4 display of "square button" banner ads? Your Web banner ad specs may be constrained by your your overall Web design. Determining how many banner ad slots there will be on your page is an important step in calculating how to create a banner ad fortune.
3. How much will you charge? The basic banner ad unit of measure is CPM or "cost per thousand impressions" (the M is Roman numeral for one thousand). Your CPM could vary widely, anywhere from $10 - $150. It's all a matter of demand. If you have minimal traffic or a very untargeted audience, you may get something closer to $10. Higher traffic? Focused audience? Perhaps large Web banner ad specs? These factors can increase your expected CPM dramatically. It can be hard finding your starting CPM. Look at some of the examples below to help you out. If all else fails, call your competitor and ask them!
4. Will this banner ad space be shared? Will you be doing any advertising in these banner ad slots? If so, what percent of the time will your ads be there? Also, will advertisers' banner ads show each time the page is viewed or will they rotate from a pool of advertisers? Know your total number of advertisers in order to know what to charge each one.

How to Create a Banner Ad Income

Once you can answer these questions, you can just plug them into the Banner Ads Revenue Estimator and know your banner ad income potential. All that and we didn't even have to know how to create a banner ad that works. Nice. Let's check out some examples of how this might look.

Example 1:
This popular Web page wants to advertise a banner ad on their home page only. They have a slightly targeted audience and plan to advertise this space exclusively.

Example 2:
A highly popular blogger has a reasonably targeted audience. She has a 2x2 ad slot available on the home page and all of her blog posts, which add up to around 100,000 page views per month. She wants to get a group of eight advertisers rotating in on these ad spaces each month.

Example 3:
Finally, a B2B site with great traffic boasts 300,000 page views in its ad space each month. It has a very targeted audience and its web banner ad specs are a single, large banner that is highly coveted by advertisers. This business wishes to advertise its own services 25% of the time and break the rest up among three top business partners.

So there you have it. Do you have questions about banner ads? About your audience? Your banner ad revenue prospects? Post a comment and let the discussion begin!