Display advertising is buying ad space from websites help increase traffic and brand awareness. The problem lies with knowing how much to pay. Unfortunately, there's no real consensus or uniform guidelines to make things easy. This article shows some factors to consider when determining the cost of placing your banner ad.

1. Comparison with Similar Websites

First you need to determine where you wish to advertise. Find websites that your target audience is frequently visiting. Determine how busy each website is and contact the appropriate ones for their advertising rates. Ask for demographics of their audience and their analytics. Most importantly you want to know their unique visitor count and determine whether their readers are within your target demographic.

As you receive standard banner rates from your chosen websites, assess and compare the pricing based on their unique visitor count and relevancy towards targeted audience. You should start to see the range being charged, enabling you to determine which Ad Space is reasonable and which is overpriced. You can also find, compare and buy Ad Space at a Banner Auction website.

2. Banner Size, Positioning and other factors

Also consider these factors when purchasing Banner Advertising:

· What sizes are on available? (Generally, the larger the banner size, the more it will cost)

· Is the website's target audience strongly related to your business?

· How many advertisements are on each page? The more ads per page, the less it should cost.

· What positions or areas of the website are on offer? Will your ad appear on the side, top or bottom? Positions above the fold (appearing on the page without requiring the viewer to scroll down) are ideal and generally cost more.

· Is there a sliding-scale ad rate for the website?

· What rotation system is used? Is it ad hoc or does the site's program automatically profile visitors and show the most appropriate banner? The more targeted the system, the higher the cost.

3. CPM, PPC and Flat Rate Pricing

CPM (cost per thousand impressions) is a charge for each thousand times an ad is viewed (or served) whereas PPC or CPC (pay per click or cost per click) is charged on each actual click-through, not just viewing of the ad. On a given site, the charge per impression should be less than the price per click-through (PPC).

If you are more concerned with leads, a pay per click model should work much better since you only pay when the advertiser sends a lead to your website. If you want brand exposure a CPM model might be appropriate. It's best to try both methods and see which one is more cost efficient for you.;

4. Negotiate with Site Owners

When buying advertising space, you may come across websites or blogs with no advertising. This is a great opportunity to contact the site owner and negotiate a trial advertising period. They may not even be aware of being able to sell advertising on their website so you can snap up some great deals this way. Currently SavvySME's introductory advertising rate a very reasonable.

While approaching websites directly, try to negotiate the advertising rates. Many are aware that advertisers will attempt to bargain with them and accordingly leave room for movement. Don't enter into a long-term contract the first time you deal with a publishing website. Try the website for 30 days, leaving you the option of not renewing your contract if you are unhappy with the performance. Remember however that display advertising sends traffic to your website and it is up to your website to convert them into customers. Make sure that you have a targeted landing page or a strong call to action once the user has clicked on the banner ad, otherwise it will be a waste of advertising dollars.

Display advertising is a cost effective way to drive visitors online, and it's important that you don't put all your eggs in one basket. Try a variety of sites and methods and then evaluate what works best for your business.