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The answer to the question is that it depends on a variety of factors. The main question you want to ask yourself is, how much money would having a banner in that spot earn you by sending that traffic to an affiliate program?

The next question you should ask yourself, is a banner ad really the best solution? Look at my website, and you might notice a lacking of banner ads. Know why? Well for the most part because I find them horribly tacky but also because banners aren’t really that effective, so why waste your time with them? Well banner ads in the way that most people use them.

I actually do generate money from this website, but not in the way that most people would think. Instead of just throwing up random banner ads, I instead well promote a company only in exchange for valuable information that could help another webmaster. So that means if you want to get your ad up at All4U.com, you have to help me come up with some great advise to share with other webmasters and in return, your website name and a link to your website will go in that article and will stay on my website as long as I keep the advice posted at my website. I found this to be way way way more effective for those spending the money to advertise with me and it has the added benefit of helping webmasters and making those tacky banner ads not needed on my website.

The point of me telling you all of this, is that I want you to think outside of the box. Not every ad has to be a banner although sometimes having a banner ad is just what works for your page design and that’s ok too.

So let’s move on to putting a price tag on that advertising space. If you were to put up your favorite and by favorite I mean best producing affiliate program banner in that very spot, how much money would it earn you?

You should know how many unique visitors per day your website gets, as well as how many page views. ie: 1 person could look at 11 different pages so that means you have 1 unique visitor and 11 page views. You also want to know the source of your traffic and the location. For example my Racquel Darrian website gets 54.8% of its traffic from Google, and 24% from Yahoo. So a large portion of all the traffic generated for that website comes from those two sources. As far as location goes, 89% of my traffic come from the United States. You can list off your top 3 if you want, and you do want if that number is below 85%. They really just want to see that your traffic isn’t coming from crappy scam countries.

Now that you know how many visitors a day your website has, and where the traffic is coming from, you want to know how many of those people will click through to visit your sponsor.

I have a good friend who let me peak at the stats on their website which had 215,930 uniques for January 2008 and it sent 48,300 uniques to their sponsors. That means that website sends 22.37% of their unique visitors to the paid sponsors. That is your sponsor click through ratio (22.37%) for that banner spot and now you want to know how much that earns you.

Using this example website again, if you send over 48,300 uniques, that’s about 1,558 unique visitors per day on average. This website made $3,580.80 that month with those visitors or an average of about $116 per day which works out to be about $.07 per unique visitor.

You want to do what is best for you but you also want to do what is best for your client because if they aren’t happy they won’t come back. So with that in mind know that you can’t afford to earn less money so you can’t take anything less than $3,580.80 for that banner spot but you logically want to earn a little more because for way less hassle you could just keep sending your traffic to the affiliate program. So you round up and say that they can have the banner spot for about $.08 per unique click.

Notice I didn’t give a flat number like $700? Well because you want to do what is best for your client and by that they should make them the offer to pay you only for the traffic you generate for them. In this case I would say they can pay you $.08 per unique click you send them, not to exceed $4,000. So if that month you happen to have some extra traffic, they get to enjoy it for free as the maximum you are going to charge them is $4,000 for that banner spot that month.

So why not just flat out charge them $4,000? Well because you want to build good relationships with advertisers and if you have an off month and your traffic sucks that month for whatever reason and there could be many reasons that could happen, the peopel paying you for those premium banner spots aren’t getting screwed.