How to Set Value for Your Ad Inventory
How much is your publication worth? If you’re setting value for your ad inventory based on outdated metrics, you could be selling yourself short.
When we talk about ad inventory, what we’re really talking about is the number of ads or the amount of ad space that your publication has available to sell. Most digital publishers calculate ad inventory by the month, but there’s quite a bit of flexibility in how you define it.
Since the goal is always to maximize revenue, you want to set a value for your ad inventory that’s realistic, but also optimistic. According to BIA Advisory Services’ 2021 U.S. Local Advertising Forecast, local advertising revenue in the U.S. is expected to reach $137.5 billion in 2021. How much of that pie will be going to your publication? Maximizing revenue potential means setting the right value for your ad inventory and not over or under-estimating your website’s worth.
It’s not uncommon for independent publishers to undervalue their ad inventory, when in fact their websites serve as a prime place for advertisers looking to reach specific audiences and demographics. The value that audience targeting provides to advertisers isn’t something that should be overlooked, especially at a time when brands are searching for better ways to connect with local consumers through digital channels.
For the mathematically inclined, ad inventory value can be boiled down to a few key equations. The potential value is the page impressions on a website multiplied by the average number of ads on each page. Ad location can affect the value of ads, as well. For example, banner ads placed along the top of a webpage are more valuable than smaller ads placed near the footer.
The fill rate is important, too, since it shows how much demand there is for existing ad inventory. If your fill rate is low, then you might be charging too much for your existing ad inventory.
To hit the right mark and set the appropriate value for your ad inventory, consider these factors:
- Ad Location: Where are the ads placed on your website? Ads that are placed above-the-fold (near the top of the page) are more valuable than those placed below the fold (at the footer). Most advertisers are willing to pay a premium when they purchase ads with above-the-fold placement.
- Creative Ad Formats: What do you know about rich media? If your publication is offering rich media slider units and other creative ad formats, then you can (and should) be charging a premium. Rich media units are intrusive to online audiences, and that means they’re more likely to be seen. Consider those higher levels of engagement when setting the value for certain ad placements.
- Traffic Source: Where does your traffic come from? If the lion’s share of your website’s traffic is coming from organic search or direct, meaning there’s no referring website, then the value of your inventory is going to be higher than a publication that gets the majority of its visitors from paid channels. Visitors who come through paid channels and social media are more likely to bounce, and that drives down the value of the publication in the advertiser’s view.
- Demographics: Who reads your publication? Where are they located? This is something that should be easy to find in your analytics. Businesses will pay a premium to match their ads with targeted audiences. Depending on what you find in your analysis of audience metrics, your audience demographics and geographic location could be very valuable. Ad inventory should be priced accordingly.
- Historical Averages: How long has your publication been around? Most digital publications don’t have long track records, and that’s OK. However, understanding the historical performance of the ads running on your website puts you in a better position to set value for your ad inventory based on demand sources, trends, and other factors.
When it comes to setting value for ad inventory, it pays to be transparent. Advertisers want to see data and analytics, along with historical performance records, and they want to understand the strength and value of the publications they advertise in.
Format is also important. We know that advertisers want ads that are as wide and large as possible. Unique or creative ad formats that drive engagement are worth more to advertisers, as well. It’s worth considering the ad format when setting ad inventory. Consider this list of Broadstreet’s all-time most popular ad formats. Local publishers who offer these formats can charge advertisers a premium thanks to higher engagement and clicks.
To learn even more about building a successful advertising program and setting realistic values for your ad inventory, contact Broadstreet Ads.