How to Calculate Advertising Fees

by Chris Miksen

Operating a website, magazine or other source of content puts you in a position to charge companies to advertise on your content. Attracting advertisers may seem like the hard part, but calculating advertising fees is often no easier. Charge too much, and companies may brush you off and advertise elsewhere. Charge too little and you'll cheat yourself out of money. The details of the ad, from where it's seen on your content to how much space it encompasses, determines the fees you should charge.

1. Determine your content's popularity. The number of people who visit your website or read your magazine, for example, largely affects the advertising fees you can charge. You'll have a difficult time convincing companies to pay a hefty fee to advertise on a website that attracts 1,000 monthly visitors, but they likely won't have a problem paying top dollar to advertise on a website that attracts 45,000 monthly visitors.

2. Consider the placement of the ad. There are two primary ad placements on content: above the fold and below the fold. Above the fold refers to the top half of the content, while below the fold refers to the bottom half of the content. Since viewers immediately look at the top half, it's the most valuable in terms of ad positioning. Always charge higher fees for above the fold ads.

3. Assess the size of the advertisement. Larger ads always warrant higher fees. Smaller ads take up less space, which allows you to persuade more companies to place their ads on your content. If the majority of your ad space is taken up by one ad, you must charge a higher fee, but consider giving a discount to companies who post larger ads. It's the same logic that applies to discounting bulk purchases. For example, say you charge $5 for small 250 X 250 ads. Consider charging $17 instead of $20 for a large ad that equals four small ads.

4. Consider the cost you will incur by running the ad. For example, a black-and-white text ad in a magazine will cost less than a colored picture ad. Charge more for the picture ad, because you will incur more expenses.

5. Determine whether the ad will be priced based on clicks or impressions, if you run a website. Online advertisement fees come in two forms: cost per click, or CPC, and cost per thousand impressions, or CPM. A company which elects to pay per click will pay you each time a person clicks on the company's ad. A company which pays per thousand impressions will pay for each thousand ads that appear on your site. The same general rules apply to each in that the price you charge will depend on the ad size, placement and your website traffic, but you should charge significantly more for each click than each impression.


  • Work out the details with each company if you're working with CPC ads. Ask the company if it will pay you each time someone clicks on the ad, or only if someone clicks on the ad and interacts with the destination site. Many companies will not pay you if a person clicks on the ad and then immediately exits the opened page.
  • Cost per action or CPA ads also exist. The companies that run these ads pay only when an action is taken. For example, if you run a CPA ad for a survey company, the company may only pay you when the survey is completed.
  • Placement of an ad for magazines can also refer to where in the magazine the ad is placed, such as the inside of the front cover. The inside of the front cover, inside of the back cover and the back cover are generally considered premium positions and warrant higher advertising fees.

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