I'm currently putting together my business plan for an online site/application that is currently in development and I've hit a very important snag... Revenue for the site is generated through ads, and I've decided to go a somewhat different route than the norm.
I've found that most sites charge per 1000 impressions (everytime the ad pops up 1000 times, the advertiser pays a certain amount).
I've read several articles and had a few discussions and it seems many business prefer Cost Per Time advertising over CPM because they know the exact amount they are paying. And while this seems to benefit the advertisers over the businesses (me) I feel the CPT model will be more beneficial when trying to attract business to advertise on the site (it is also a lot easier to keep track of).
The only problem is... what do I charge in the beginning when the site has just launched? In a perfect world, I would simply launch, build a user base, then use the hard data to come up with a fair price... but when writing a business plan... how do I come up with a postive, realistic number?
Can I throw out a random number that seems fair... for instance $20 a day to occupy the top advertsing spot in the beginning, then slowly raise the price as the user base grows?
Or do I do something like the following (not my real projected numbers by the way)... say I expect to average 20,000 unique visitors per week, so I charge $20 a day ($140 a week) which would be like charging $7 cpm...
I hope that all makes sense, any help would be greatly appreciated.