How much do banner ads cost?

Well I never thought I would be asking this question, but it needs to be asked before I make a mistake that I might regret later.

I currently run a fairly popular and rapidly growing specialist interest community site, i.e. forums, blogs etc. I currently fund this through Adsense banners and members subscriptions (around 10% of members are subscribers and they do not see the AdSense banners (except the single front page vertical banner). These are the current Google Analytics stats for the month of April:

Visits: 72,473
Absolute Unique Visitors: 8,302
Page Views: 1,374,716
Average Page Views: 18.97
Time on Site: 00:20:40
Bounce Rate: 10.34%
New Visits: 9.33%

Now, this morning I received an email from a company that sells products relevant to the subject of the site. They would like to place a vertical 160x600 banner ad on the front page of the site and a horizontal 730x90 on all other pages. These would replace already existing Google AdSense banners and would be images. I have already advised them that Subscribers would not see the banner and the company is happy with this.

Now this is something absolutely unexpected and I am utterly unprepared and have absolutely no idea what to do. So can anybody answer these questions:

  1. Based on the stats above, can anybody give me a ball park figure of how much should I charge for these (I assume the front page ad would be less as it is displayed less)
  2. Is entering into a long term, i.e. 2 year, contract a good idea? It seems to me that this could prove to be a bad decision as if the site continues to grow, my costs will increase and this banner space could be worth considerably more (which will fund the additional costs)
  3. What am I not realising/forgetting?

$500 above the fold. $200 on right or left. $100 below the fold.

  1. I couldn’t give you a decent estimate without knowing your site topic, user demographics and other information. As a general rule though, I would charge double what you would have got from putting AdSense in those ad spots. It is up to you whether you charge a flat fee for the month or via CPM (being paid for every thousand impressions).

  2. I would avoid long term contracts unless you are very very happy with the terms and completely trust the company/person you are doing business with. As you said, if the site continues to grow the price they pay for your ads may look good now, but may be selling your site short in 18 months time.

  3. Take a look at this guide for selling ads directly to advertisers (at my site)

-Tim

I prefer business established through direct contact with the advertiser (as opposed to advertising programs), and therefore usually offer them CPM advertising at a cost of 75-85% of the eCPM I get with advertising programs. Of course, this is just my rule of thumb, there are variations.

The Front page is the most important page of your website and should be the most costly for ads.

Another thing that you should look at is how much money are you getting from adsense. If you are going to replace all your adsense ads with this advertisers ads then what ever you got from adsense, make sure you get more from the advertiser, but don’t go over board by charging to much. If you end up charging less than you are getting from adsense and you replace all the ads with their ads, then you are really putting yourself in a worse scenario.