One of the biggest ways to NOT make money online with your blog is to charge excessive prices to advertise on it! All too often I see new or small blogs charging hundreds of dollars for links and/or reviews and it comes as no surprise that nobody’s buying them!But how much should you charge for advertisers to rent your blog’s real estate? I’ve found the best way to tackle this problem is not think in terms of “how much money do I want?” but to consider “how much would someone pay?” for your blog.

Consider a blog that has a modest 100 unique visitors per day and the owner wants to sell a text link directly under the header. After placing an unsponsored link there, the owner tracked the clicks to the link and found that approximately 5% of the site’s visitors clicked the link. In this hypothetical blog’s niche, it would cost an advertiser a minimum of 15cents per click to run an Adwords or similar pay-per-click campaign. So how much should the owner charge?

5 clicks per day x 15cents x 30 days per month = $22.50 per month

The price of $22.50 per month would be very attractive to advertisers as it is the same price as a similar pay-per-click campaign, yet the advertiser knows exactly which site their ad is going to be advertised on, where the link will be placed and what type of visitors will be directed to their site.With this method for calculating the price of text links, the location of the link and how many other links there are becomes irrelevant as it is priced purely on how much traffic will be sent to the advertiser’s site.

Of course, there are other factors to consider:

• PageRank - Will your site attract advertisers who are interested in your PageRank? If so, the price will need to rise…but most advertisers are interested in traffic and exposure more than your PageRank.

• Opportunities Missed - Could you make money by placing an affiliate link instead of an advertiser’s link? If so, you’ll need to estimate how much money you will be missing out on and factor that into the price!

• Relevance - Accepting advertising that’s not related to your blog makes your site appear “cheap” and you run the risk of new visitors being unsure of your site’s focus. You should receive extra payment for this.

• Ad Size - While text links are pure traffic generators, banner ads provide exposure and product awareness for an advertiser. Add a little extra on to the price for this!

After you’ve estimated how much your blog is REALLY worth, cut the price in half and you’ll have a good indication of how much advertisers are actually willing to pay!! UPDATE (14 May): Some readers have commented that Text Links Ads and ReviewMe already offer suggested prices for links and/or reviews. Please keep in mind that these suggested prices take take into account that TLA and ReviewMe receive a 50% commission for all sales. It is in their interest to suggest a higher price than the true value and drive the market price up. ReviewMe suggested to me that I charge $100 for a review. I don’t feel a review is worth that much to advertisers yet and I chose to charge a more appropriate rate based on the above calculations - and advertisers buy them!

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