Digital Inspiration tries to answer a question posed by Felicia Coley on how much she should charge for direct advertising. The method that Amit proposed was to run a Google Adsense unit in the same slot and to note the CPM, and then charge the advertiser 20% less.
I think the logic here is totally wrong. If the Google Adsense CPM is 20% higher, then why would you replace it with a direct ad and make less money?
Personally, I’d do the exact opposite. If an advertiser wants to take over one of my spaces and serve their ads then I’d charge a premium. This also makes sense as remember the CPM received from Google is the net CPM which is only around 60-80% of what the Gross CPM is that Google charges advertisers. If you sell a campaign directly then you should be pitching for the gross CPM.
Also, traditional ads work differently to Google ads where advertisers only tend to benefit from actual clicks, whereas an advertiser buying a direct campaign can benefit from having their brand seen in the right places at the right time, just like old media ads.
What do you think is a suitable premium for direct ads?
