Well in all honesty it depends on the visitor doesn’t it? That said it is still fundamentally important for content publishers and internet marketers to understand how to value their web traffic. Knowing the answer to this question is vital to answering the two most important questions a web business owner can ask, such as:
E-commerce Web Site Publishers- How much should I pay per click for my advertising?
Online Content Publishers- How much should I charge to sell ads on my site?
While both of these questions depends on a number of variables the first one is very easy to answer. The latter question is much more difficult as some aspects are inherently subjective and depend on many variables beyond the control of the web publisher. That said, here are some basic rules that will assist you in arriving at a useful number.
The easiest way to get a rough estimate for the value of a visitor to your web site is to base it on the the average gross profit you are likely to gain from a sale. In example, say you are selling widgets, and your average widget sale nets $20 in profit. Now your widget website is well designed and it converts and average of 3% of it’s visitors into customers then you can calculate a good rough value for a visitor to your web site by multiplying this percentage of visitors by the average profit. Which in this hypothetical case is 60 cents, based on 3% multiplied by $20.00 which equals 60 cents. (Or more simply put .03 * 20 = .60)
If you are a content web developer then this whole model has to be turned on it’s head. A key concept to understand as a content developer for the web is that your content is not your product. Your viewers are.
This is an important distinction to comprehend because while it is your work that your readers come to your site for; it is your readers themselves that advertisers are buying. This exactly the same way it is in traditional media. Newspapers, magazines, television shows, they all sell the viewer and the content they provide is simply a vehicle to capture the attention of their segment of the market.
Obviously, the number of viewers is important as a gross estimate for the value to an advertiser, so to is their income level, age, demographic and a whole slew of other variables that go into calculating the worth of your site’s ad space. Things get even more complicated when you begin to consider that the advertisements click through rates will vary depending on the ad’s appearance and location. I think it would be reasonable to assume that an ad for a Prius on a page about the new Prius in a blog about shopping for Hybrid cars will get significantly more click’s than the same ad on a site about muscle car from the 1970′s.
My advice in this situation is start running ads using Google Adsense’s automated ad management system to determine average click-through rates. I know this is kind of putting the cart before the horse but, Google offers a slew of very valuable and sophisticated marketing tools, and let’s face it, even if you have the most accurate demographic and traffic information there is no real way to estimate accurately how an ad will do on your site without putting one up.
Once you have established your ad click rate things get a bit more easy. I say a bit more easy as different markets have different values for a click through but since they are all competing for your ad space the numbers should work themselves out in the market.
So let’s say you have a Mens lifestyle and travel magazine and you have 30,000 page views per month and you end up with 600 clicks per month. If the value of a click through for your advertisers averages 20 cents per click then the value of those 600 visitors to your advertisers might be $120.00 a month. Which in this hypothetical case is 600 clicks, multiplied by $.30 which equals $120. (Or more simply put 600 * .20 = 1.20)
In all honesty, this article is just the barest of introduction to the process, marketing goes deep and there really isn’t a bottom to what you have to know. That said, once you get started it will generally start to make sense and the experience you gain will help to lead you down the long and winding road of Conversion Optimization. A topic I will cover in a future article.