How to Set Your Ad Prices Via a Real-time Auction Like Google and Facebook
July 8, 2009 – 9:55 pm How to Set Your Ad Prices Via a Real-time Auction Like Google and Facebook
Chris Petersen has a successful blog. He generates millions of page views monthly, which he currently monetizes with Google AdSense and a couple of other ad networks.
He also gets about 10 – 20 emails from advertisers every day. Requests range from “Send me your price list (or rate card in advertising lingo)” to “Can we get a 40% discount if we commit to advertising for 6 months”.
Poor (and I use that term lightly) Chris just wants to write content so he does a quick search on Google, and discovers a little tool called Trafficspaces. Great. Now, advertisers can just book their ads online and get their discounts automatically. Problem solved. Err, no.
It turns out that Chris doesn’t really know what price to sell his ad spaces – $10CPM for the home page leaderboard?, $0.10 per click for the text ads near the footer? To compound the problem, it turns out that his advertisers all have different opinions on what the “right price” is.
Solution – use an auction. Duh! Google does it, Facebook does it. Of course, it makes sense. Why didn’t I think of that before.
This story is pretty common, so we’ve added auction-based pricing to Trafficspaces.
Here is how it works:
1. You set up your minimum price, and the incremental amounts that advertisers are allowed to bid.
2. At checkout, the advertiser specifies their budget and their max bid price
3. For every impression that is served, the ad server runs an auction and the ad with the best bid and performance wins. Simple.
Now you have the elegance of Facebook and Google Auctions for a fraction of its price.
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