How to Determine the Right Price for Sponsored Content

Finding the perfect price point for sponsored content from a publisher’s point of view can be a tricky ordeal.  Publishers use all sorts of strategies and metrics to justify pricing, and we will cover a few of them that we feel make the most sense.  Keep in mind though, despite the formula or method you decide on as a publisher, your main priority when pricing should be: what type of sponsor do you want appeal to, at what price level will both the advertiser and yourself receive a favorable ROI, what are your competitors selling them at, and how often do you want to sell them.  A piece of sponsored content isn’t just a banner, so everything should be considered in your pricing strategy.  Let’s start:

Useful information to consider before picking a pricing strategy:

• Average number of reads or views a piece of content on your site receives from all sources.  (Average, not your top 10 most popular, you don’t want to disappoint and ruin the chances for recurring business)

• Whether the piece of sponsored content will be an advertorial, or branded content.

• The duration the piece of sponsored content remains on the site, and how long it remains on the front page.

• If your content gets syndicated to other publishers.

• Your website’s voice within your niche.

• Typical engagement metrics with your content: likes, tweets, comments, stumbles, etc.

Once you have that information, there are really a few main strategies that make sense and can be altered to suit your needs, which include: pricing based on engagements, reads, impressions or a combination.  If the sponsored content has a temporary duration, simply using an impressions or average reads benchmark may be the easier strategy to start with, but with permanent durations, you may want to consider using a combination of reads and engagements.  At this point you could be wondering, what about the amount of clicks I get them, shouldn’t I base it off that?  Well the problem with that is, it is already hard enough to predict the number of reads the content will get, but even more so the CTR on a direct link to their site afterwards.  A reader may also very likely read the article and then Google the brand instead of directly clicking through.  So it really would be a tough job to try and solve that problem.  Let’s go through some very basic examples below:

Using Impressions as a Benchmark:

Example Assumptions:

• Duration: 1 week

• Desired CPM: $5

• Impressions of pages the article will be placed: 35,000 (If you post 10 articles a day, and each page has 10 articles, then add up the number of impressions pages 1-7 get per week. Just using your overall site impressions will not make sense for this method)

Pricing Calculation: 100,000/1,000 x 5 = $500

Using Reads as a Benchmark:

Example Assumptions:

• Duration: 1 week

• Desired Cost Per Read: $0.20 (See our Cost Per Read article)

• Average number of reads an article gets in the first week: 3,000

Pricing Calculation: 3,000 x $0.20 = $600

A Combination Approach:

Before delving into it.  At some point the pricing of a facebook share, or traffic coming from a piece of content posted a year ago as opposed to within the first week, will begin to get pretty subjective.  Let’s assume that the content on average for your niche, will be relevant to the brand for 12 months, and you create content that usually gets quite a bit of engagement activity enough to justify a 20% markup on base price (sponsors want to see discussion and shares, not 0 comments and 0 likes across the board).  Also remember usually the social media sharing will just bring back more traffic to the article anyways, which will already have been integrated into the average reads.

Example Assumptions:

• Duration: Permanent.

• Desired Cost Per Read: $0.10

• Average Reads Articles Receive Over 12 Months: 7,500

• Engagement/Niche Markup: 20%

Pricing Calculation: $0.10 x 7,500 x 1.2 = $900

Now remember, these are very generalized guidelines for a few pricing strategies.  For example, if you are an IT blog looking to sell advertorials on a weekly duration basis to SaaS providers, Facebook likes probably will not be the reason the sponsor will be interested in the opportunity.  On the other hand if you are an entertainment publisher that focuses on viral content, social media sharing may be the main selling point to a brand.  The type of sponsored content also plays a big role.  If it is a brand just endorsing relevant content, a ‘read’ may not be as significant to them on an ROI basis, as if it were an advertorial entirely dedicated to their product/service.

Hopefully this was helpful to at least get an idea of a generalized baseline strategy if you have never sold sponsored content before.  Remember, you can always give one of these methods a shot, get feedback and change your price accordingly from there.

If you would like personalized suggestions you can always email us at: publishers@AdvertiseWithin.com.

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