Big Company wants to Advertise on my Site

[Elvie]

I've never sold any major advertising before - I usually rely on Google Adsense and affiliate ads. I just received an email from one of Canada's top 20 biggest companies and they want to buy space on one of my sites. It sounds like they just want their logo with a link to a specific division within their company. We are setting up a time to speak on the phone later today.

What information should I arm myself with? I imagine they'll want site statistics? Can anyone offer me any advice?

I have no idea what figure I'd be looking for, but realistically, a figure as small as $20/mth would be more than Adsense makes on that site in a month. It's a very targetted niche site - a blog actually - so they would definitely be reaching their target audience, however the traffic levels aren't enormous.

This is exciting!

[Chris]

You can ask for much more than $20 a month. The cost for them to even setup a contract with you would exceed that by far so they must be willing to pay more.

Also see if you can get them to agree to a long term placement with advance payment. Something like say $1000 for an entire year.

[Elvie]

Thanks Chris!

I hope he has a figure already in mind and spills it early during the phone call so I don't totally low-ball the deal ;-)

[Emancipator]

that is the tough thing, not low balling yourself. I have done it twice. BELL advertised on my site for 2months and yeah i low balled myself and really should not. I am getting ready to sign on with gorilla nation and let them handle it all :)

[KLB]

I agree it is much more cost effective for everyone and more profitable overall to try and get 6 or 12 month advertising contracts. I have some advertisers who pay me on a six month basis and others who pay me on a 12 month basis.

[Elvie]

Well I had my phone call with the potential advertiser... but he didn't spill it! He gave no indication of what he is willing to pay. He would like us both to think about figures and talk again on Friday. He would like me to put together a rate structure for him. He prefers a monthly rate.

The site in question is probably the ugliest site I own. I've been wanting to invest some time into it's layout, so maybe now is the time!

[KLB]

My advice would be to offer a monthly rate with discounts for three month, six month and twelve month payments (maybe 5%, 10% & 15% respectivly). Make sure it is a rate that is really worth your time and effort.

[paul]

Old negotiating rule "The first person to mention a number looses." :)

[Uzzz]

Old negotiating rule "The first person to mention a number looses." :)

hmmm...please explain... :cool:

[KLB]

hmmm...please explain... :cool:
Basically the advertiser asking you to state your rate first is taking the gambit that you will under value your ad space. They will then try to negotiate your rates down even further.

[Grant29]

Compainies usually have really large advertising budgets. $20/month would be a steal for them. I'd aim high, and if they balk then negotiate lower.

It's always nice to get the most money you can, but keep in mind that it's always trial and error. If you get low-balled once, you'll know better for next time. It's not the end of the world...

[Shawn]

What is the market? It all depends. If he's selling dog food, his budget is obviously much less than if he's trying to sell car insurance.

For ANY topic, I wouldn't ask for less than $500 a month. If you had a topic that made them quite a bit of profit per sale, I'd charge thousands. They can afford it.

[JasonN]

How can anybody throw out numbers without knowing the site's traffic?

I posted a few weeks ago about an identical situation. They made me give a number first, so I said that it will depend on some things I don't know yet about the effective CPM of some competing ads but I'm guessing between $1 and $10 CPM. They said it sounds like a good range.

[Elvie]

Thanks everyone for your ideas and input.

I've went back and forth on this issue. Part of me saw dollar signs and wanted to charge "da big bucks" since the company that contacted me is so large, and part of me wanted to put together a more reasonable price to attract additional advertisers.

I visited many websites in the last 24 hours that offer advertising rates so I could put together rates for my sites. I found that the sites that charged high rates had next to zero ads showing, and in some cases, they had zero ads. The ones with a low rate had several advertisers.

In the end, I know that my site will provide very targeted traffic, and yes this particular advertiser's product sells in the thousands and thousands of dollars, but I want to attract other advertisers at well. I set my rate to start at $75/mth for a small sidebar graphic (eg. company logo) with a discounts for 3, 6, and 12 month terms. I also kept in mind that the site in question isn't making more than $20 a month now, so $75 a month even for one advertiser would be a significant improvement. This site is in a niche that should attract other advertisers once I restructure the site to accompany them.

I will let you know if this advertiser accepts my terms. Thanks again for all of your ideas.

[KLB]

Elvie, you are correct that sometimes it is better to charge less and attract more advertiers that to charge a lot and attract no advertisers.

It sounds like to me that you have struck upon a very reasonable and logical pricing plan and I suspect you will succeed with your pricing model.

[Elvie]

Update:
Wow big companies move slow. I hadn't heard a word back on my advertising proposed rates until today. He emailed me to thank me for my quote and said he will review it and let me know if he wants to proceed.