How do I calculate CTR for ads on my small site?
So recently I opened up ads on my site Keto List Singapore. It's a directory/listings site of keto-friendly eateries and places in Singapore, inspired ala Nomadlist by levelsio. I wanted to monetize the traffic a bit, so I experimented with paid listings - basically, pay $10, and your listing (say a bakery) gets moved to the top of the listing where there's higher visibility.
A potential customer was interested in advertising and asked about the click-through rates of the top listings, and specifically asked for a competitor's CTR. I was stumped. So my questions are:
- Is it ethical to share the CTRs of other businesses that's on my site with their competitors?
- My site is no Google, so does it make sense, or is it even possible, to calculate the CTR? If yes, how do I do it? (Is it through tracking outbound links and dividing by page views within a same time period?)
Disclaimer: I'm a complete noob when it comes to advertising and marketing, so please pardon my silly question and feel free to point out where I might have gone completely wrong.
Thanks!
Jason
Congrats on launching your first ad product! 🍾
I also love that the advertiser tab is an Airtable form! What stack you used to make the website?
As the other users mentioned, it’s pretty standard to share expected CTR, but you should also not make any implied guarantee when you do that. It’s quite normal for a “sponsored listing” ad product to be on a CPC/CPA model (advertiser pay per click / action). Ad products that are more brand oriented (display/video) are usually priced with a CPM model (cost per thousand impressions), but I don’t recommend this for a local site like yours.
I would also come up with a custom link for each campaign: you want your metrics to match the ones the advertiser will be tracking (for example by having google analytics on the landing page and tracking the referral URL).
I like the flat price idea, but if the advertiser keeps renewing it means you are pricing too low! Adding competition (other advertisers) also will help you make more money.
Best of luck!
Thanks! Yes, it's a scrappy Airtable form now haha because what was just an experiment is now an interesting little side business.
My stack: this is a nocode product actually. Airtable as backend and CMS, table2site.com as frontend and site generator, Airtable for forms, Mailchimp for newsletter, Telegram for chat, IFTTT for automation.
Curious: why do you say you won't recommend CPM model for a local site like mine? (Since that's the industry standard) Why do you prefer the flat rate?
Great idea about custom link! That means adding something like a /?ref=ketolist to the URL of the link, right? (sorry not much of a programmer)
I onboarded about 4-5 advertisers now. But beginning to feel that it might not scale for large numbers, as everything in the list would be featured (which means nothing is).
Both CPC and CPM models are standard. CPC is more popular with sponsored search / listings (intent based, easy to measure conversions). Do some research on your advertiser customers, ask them what model they are most comfortable with! Look around competitors to have a sense of the market rates for your segment.
If I’m an advertiser, the flat price really encourages me to take risks and try a new, unproven channel like your site. As you increase demand, and supply becomes scarce, raise prices!!! 🤑
Scalability problems are really common in advertising. Hence, once a site gets established, they most often go programmatic (google “programmatic advertising” to learn more)
I just calculated the same thing at intravert.co (btw, might be something you would want to look into). It's quite simply price / clicks. You might also want to share CPM which is price / (impressions / 1000). It's very standard to share those numbers beforehand.
Love intravert! Have much to learn from your product. :)
I like the simplicity of your model. Just price per 1000 clicks or impressions.
I think sharing those kinds of numbers, without sharing the businesses is fine, but also shouldn't be used as a guarantee.
I wouldn't complicate things too much, just take the number of clicks the ad received and divide it by the number of impressions (not sessions) that the ad had. Typically impression ad pricing is based around CPM or cost per mille (mille === 1k), that's why you should do that metric.
Honestly, I'd probably avoid the $10 per month flat rate pricing and come up with CPM based pricing that you and your advertisers are comfortable with.
Take into consideration, because you're not charging for a fixed amount of impressions, there's the scenario where month 1 you end up with let's say 2 advertisers, which will split your traffic 50/50... fast forward a few months later and you have 100 advertisers, they'd be receiving 1/100th of the traffic (which may or may not have grown, but will be distributed as such).
Nothing wrong with coming up with a flat rate for a large block of traffic (perhaps a single add that gets 100% of your traffic, while other advertisers can opt into CPM based pricing, which will be less prestigious on the site).
Thank you, good points about flat rate versus CPM based pricing. Seems like CPM is the industry standard? (Not in marketing/advertising so not sure).
I'm wondering now, what might be the benefits of flat rate over CPM? Have you seen any site succeed with flat rate when all its competitors are doing CPM-based pricing?