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Wednesday, May 2, 2007

Banner Economics

Les businesses on line, like remote businesses, always boils tothe bottom with the maths: the difference between the cost andthe income. If your countryside of banner costs more than its to gain,you will not be in the businesses for very a long time. To appearoutside how your countryside made, youre going to have to know yourcost by Thousand, your click by the rate and your convertionrate. They are your basic tools. If you do not know them, todiscover!

Laisse the word which your CPM is $20, your CTR is1%, and your convertion rate is 4%. (Thus the youre paying with the$20 all 1.000 times your banner is shown, it brings 10 new users toyou, and you make a sale for each 25 users that the advertisementbrings). The question that you must wonder that is how much costwasting you on the 24 users who do not buy pas.

Co�ter byvisitor = $20/10 = $2 thus costs of each visitor you $2, but you need25 visitors to make a sale, thus...

Co�ter by sale = $2 *25 = $50... if your product is worth the sorrow than $50 less, youremaking a rather simple perte.

Thats, and as you can see,much theres not part to operate here. The margins are tight on thebanner announcing and that applies to the site selling advertisingspace and the webmaster achetant.

Naturellement, the hardmoney isnt cash the only manner of measuring the success of anadvertisement of banner, and a theyre of still popular reason is thistheyre by pretty effective tool stigmatizing. After all, theadvertisers spend of the million on billboards without expecting thatthe motorists lead directly by them and make a purchase! On the Web,these advertisers can even be reasonably sure that the people who seetheir ADS will be interested by them. But to stigmatize does not costmoneylots of itwith any guarantee of the results. Its usually betterleft with large the gar�ons.

La banner ADS on my sites sendusually users to my partners of subsidiary company, and the place ofbanner ADS I on other sites of people usually come from my programs ofsubsidiary company. They do not cost me something and as a length Immaking the sales to pay my partners of subsidiary company, everybodysheureux.

Si you decide to buy advertisements of bannerhowever, and if you have a very specific market of the spirit, to makesure that they are strategically sites of placedon where the trafficwill be most certainly interested by your product or service. To finda site which is appropriate exactly for your specific product andyoure energy to call upon your cible.