How to Build Online Rate Cards

Online rate cards are more than just the rates themselves. They also are about the presentation and promotion.

The most brilliantly devised rate card won’t deliver results if it is hard to read, confusing and overly complicated.

It also won’t deliver results if no one can find it. Believe it or not, many websites that have direct sales do a terrible job of communicating rates. (Unlike sites such as this one which have only network advertising.)

Some even do a terrible job of telling potential customers who visit the site how to advertise at all. The end result often is a lost prospect.

The reality is that prospects find out about rates mostly in two ways: direct contact from the sales rep to the prospect or direct contact from the prospect to the rep or site owner.

In the online world, direct contact initiated by the prospect is often in the form of going to the site, clicking around for information about advertising and either calling or emailing for more information.

Most potential advertisers don’t go to that kind of trouble for three reasons. They:

1. Don’t want to waste valuable time.
2. Lose respect for a publisher who appears to be inept at advertising.
3. Already are getting plenty of publishers contacting them.

But once the contact has been made, of course what may make or break a deal is the rates themselves.

Setting Rates

Despite reports of national CPMs continuing to drop and averaging in mid single digits, online rate cards vary wildly depending on several important factors including:

• Supply and demand for a particular site
• The dominance of that site in that business category
• The average rates for that category, i.e., travel and health command higher rates than news
• Whether the site is highly targeted
• The ad’s creative type, such as static banner, animated or video
• The state of the economy

Some sites command rates in the high double digits and even breaking $100 CPMs depending on the situation.

Other factors specific to creating online rate cards include:

• The visibility of the ad unit, i.e., the higher on the page, the higher the rate
• The ability to target topically, demographically or geographically
• Demand for campaigns in that position
• Total available inventory in that position
• Average response rates for that position, including clicks, calls and emails. (A good ad generates response from more than just clicks if it includes a phone number or other ways of contacting the business.)

Rate Cards Via Supply and Demand

In reality, the competition for online advertising has never been greater because of the growth of websites and website content. Big players such as Google and Facebook who gobble up market share make finding ad revenue even harder.

One simple way publishers can set rates is with a strategy that balances supply, demand and sellout rate. Publishers should review rate cards and inventory sellout levels quarterly.

A site that sells out only 20 percent of its inventory is either overpriced or not selling effectively (or both). A review of competitor rates will show if the site is overpriced.

Discounting

Assume for the moment that the rate for a 300×250 ad position at the top of a page is a $10 CPM.

Is that $10 CPM good for every situation regardless of how many impressions the client buys or how long the campaign runs? The answer often is no.

First, a client should be rewarded for buying more impressions. It improves the sellout rate on the site and in effect lowers the pressure on the site to find another client to buy those extra impressions. It eliminates the time and resource cost of finding more revenue.

Second, the client should be rewarded for a longer-term contract for the same reasons as above. The process of retaining a client after a brief campaign comes at a cost of time and money (labor). If the client isn’t retained, the effort is fruitless and a new effort begins to find a replacement client.

One simple rule about online ad rates is found in retail stores. Stores with high prices are likely to have high margins. With high margins, they can discount more deeply than a low cost store such as Walmart or Target.

The same is true about ad rates. The higher the initial rate, the more deeply the rate card can and should discount based on:

• The volume of impressions
• The length of time for the contract
• The retention / loyalty of the client

Presentation

In traditional media such as newspapers, some rate cards are pages and pages long. There are examples of sales reps having to go through extensive training to understand these complex rates. Even then they often make mistakes because they don’t fully understand them.

If a sales rep has to go through training to understand the rate cards, how is the customer supposed to understand them?

People online move quickly from page to page and site to site. They often scan rather than read. If a prospect comes to one site and sees a one-page rate card, and goes to another site and sees a 10-page rate card, which one will that prospect more likely read, understand, trust and use to initiate a contact?

The above-mentioned Adweek rate card was one page long. It was simple, easy to read and easy to understand.

It didn’t have any graphics, had one color other than black and displayed a simple logo at the top.

Promotion

Many sites don’t post their rates online at all. In some cases it is a conscious decision. In other cases it is an oversight. Some have them posted and then lose the link as a result of site design changes.

In my experience, the more promotion of rates the better. The standard practice is an “Advertising” link at the top or bottom of every page on the site. The link goes to a page touting the site’s audience, targetability, ad spec requirements, etc.

Links to online rate cards should be prominent. The rate card ideally is a one- or two-page PDF that is easily downloaded and printed.

Finally, consider using remnant impression space to run house ads that link to the advertising page.