## How to Estimate Banner Ad Costs

The cost to advertise depends on many different factors, like targeting or placement. In general, the more you target the more you can expect to pay a premium, mostly because you’re shrinking the potential inventory you have to choose from and being highly selective. Targeting saves you money and could potentially increase the conversion rate of your display advertising, but you need to be able to properly estimate the costs associated with it before you begin a campaign.

Calculate Costs

Cost=CPM x (number of impressions/1000)\$5 x (100,000/1000)=\$500

Cost per click is calculated based on the amount of clicks you intend on receiving, so it uses slightly different metrics to calculate value. You need to know the value of the click, then divide that by the potential clicks your campaign is likely to receive. Most banner advertising networks have some kind of gauge that gives you a rough idea of how much traffic you could potentially receive. Estimate that number on the high side and you will always have enough in your budget for the coming month.

Costs=CPC x Number of Clicks

Conversion Rate

The conversion rate is not a set mathematical formula, rather an educated guess based on the data you have before you. You should know your CPC or CPM by now, which does help calculate the rate you can expect on your investment. Still, your campaign may receive more or less clicks than what your model shows. Once you have data rolling in, you can measure the number of people who took action against the amount of clicks the ad received. Then multiply that number by 100 to get your conversion rate as a percentage.

Final Thoughts

A certain amount of math is essential for reading and understanding your campaigns. A spreadsheet that is programmed with these formulas will help you get the job done much faster, and give you historical data you can refer to when you want to know what works best.

Bio: Ted Dhanik is the co-founder of engage:BDR. As a direct marketing professional, Ted Dhanik has over fifteen years of experience in the field of business development. Find out how to improve your campaign’s conversions by visiting Ted Dhanik online.

## How to Buy a Cash Register for a Coffee Shop

Thu May 29 , 2014
This article was written by Ted Dhanik The cost to advertise depends on many different factors, like targeting or placement. In general, the more you target the more you can expect to pay a premium, mostly because you’re shrinking the potential inventory you have to choose from and being highly […]