How to charge for ads on your site!

I'll be really broad here, but I believe a good start is figuring out what a good CPM is, or "cost per thousand". For those confused, "M" is the Roman numeral for thousand.

Basically a CPM represents the amount of money an advertiser would pay you, per 1000 impressions (views) on your site.

Now CPM generally floats based on niche. Categories like weight loss and legal typically have much higher CPM's then say celebrity gossip. It is up to you to come up with this number.

For the sake of example, lets say you or I determine a good CPM for our site is $1. That means for every 1000 impressions you receive on your site (and thus on an advertisers ad), they're going to pay you $1. Furthermore, let's say our site is getting 25,000 impressions a month.

So how do we solve backwards to find what the ad cost is? Lets look at the basic formula first:

Ad Cost / Impressions = CPM

Let's rewrite the formula moving impressions to the other side of the equation:

Ad Cost = CPM x Impressions

So lets plug in what we know.

Ad Cost = [($1) x (25,000)] / 1000

The reason we divide by 1000 is because we are dealing in thousands. Hence, CPM, or cost per thousand.

Therefore, based on our example of a $1 CPM, you could effectively charge $25/ month for an ad on your site.

What you need to do now is do some research and find out what a good CPM for your site is.

For your reference, here's a short breakdown on some general figures:
Social sites (forums/chat/etc) without direct ad sales teams: <$0.25 CPM
Largely international sites: <$0.50 CPM
Medium-sized sites that use banner ad networks: <$1 CPM
Reference sites in a specific category: >$5 CPM or sometimes much higher, depending on category – for example, some home improvement reference sites run as high as $20 CPMs

Keep in mind, there are a lot of factors determining what your CPM can/ should be, so don't just use the biggest figure you can find while Googling or else that ad company is going to think you're crazy.

Hope this is a good start for those looking to value ad space on their sites!

Cheers,
Ben

Do not know if this helps you at all, but I charge $3 for 1000 views (banner ad 468x60) or $5 for 5000 views.