Ryan Dorhn, CEO of Brain Swell Media, sets out in this weeks Shweiki Media webinar to teach web business owners how best to price online services. Dohrn claims that as an internet consultant the question he gets asked the most is, “how do I price my online advertising/services for maximum efficiency?”
Dohrn claims that the first step in proper web-pricing is gathering proper data. The first step is to stop referring to web traffic in terms of hits. “Hits” Dohrn exclaims, “is an irrelevant way to track website traffic.” Dohrn explains that most websites are one page set-ups. Of course, within that one page their lies multiple buttons and banner ads that all ad to one’s hit total. Instead of counting every minor hit as a success, Dohrn believes one should throw out the hit category altogether, and focus on generating impressions or page views.
Click Through Rate
Dohrn’s next step in generating an accurate web price model is determining ones click through rate. A click through rate is a tracked statistic of every click on a banner ad within ones site. In the example above, the user served a hundred banner ads, one was clicked on, and therefore the click through rate is one percent. Dohrn includes the national average (.25%) as an important pricing statistic, because if ones CTR is significantly higher, that becomes instant leverage for increased pricing.
Total Users Vs Unique Users
One of the more important steps in identifying ones web worth is differentiating between total and unique users. In short, the total amount of users is the sum of visits to ones site. The number of unique visitors is the total amount, minus repeat visits (or as Dorhn explains it, how many eyeballs see the site).
Improving Click Through Rates
Since click through rates have a direct effect on web pricing, improving them is a worth-while way to generate more revenue. Dohrn, claims that the easiest (and most effective) way to improve one’s CTR is by simply maximizing banner size. A larger banner entices viewers to click more effectively than a smaller one. Also, a simple shift in location is another proven technique to boost CTR, as a banner crammed in the dark depths of a page is seen as less credible than one neatly perched in the center.