Prices vary depending on the following:

• Type of display units. Standard banner ads will be less expensive than rich media ads.
• Quality of the content. The more targeted the audience of the web site the ads will be displayed on the higher the price.
• Placement of the ads on the site. If the ads are to be displayed on specific pages they will be more expensive then Run of Site (ROS) ad buys. ROS is where the ads will be displayed through out the entire site. Example: Ads on Yahoo’s home page cost hundreds of thousand of dollars per day. Whereas banners that run ROS throughout Yahoo can go for as low as a couple bucks per 1000 units (CPM)

For “junk” traffic (junk defined as not very targeted advertisements) you can pay between $0.25 to $1.00 CPM.

More targeted traffic will cost anywhere between $3 to $15 CPM (as of mid 2008 — prices are changing for the lower now due to the economy).

Current click through rates for display ads are about 0.3% at the time of this post.

The pricing here is for directional purposes only. The real test is to determine how valuable a media exposure is to you then back into the cost you’d pay for the impressions. For example, if a sale is worth $10 to you and you expect to close 1% of consumers exposed to your advertisements then:

100,000 Ads * 0.3% Click Through Rate (CTR) = 300 consumers to your web site * 1% conversion rate = 3 sales for each 100,000 banner impressions. Those 3 consumers made you $30. So your break-even CPM is $0.30.