How to price advertising for a digital magazine publication—simplified.

how to price advertising for a digital magazineBear with me. I’m going to get a little specific about a topic I haven’t written about on my blog before but I’m going to try to make it easy to understand so even if you’re not into magazines, you’ll be able to use this information one day.

Step One: Calculate your business’ operating costs.
Your typical business costs for a digital publication will differ from place to place depending on the size of your readership and many other factors. The benefit of a digital publication is that you’re cutting out the largest part of running a print magazine—the printing! Instead, you’ll have costs accrued (that most print publications also have to factor into their costs) for website hosting, digital publication hosting (places like Issuu, BlueToad, and Magcloud), online community management, and the list keeps going. The production costs for writing, editing, design, photos and sales are things a lot of people cut corners on but just remember—this is your product, make it something people want to read.

Example: eMagazine costs $10,000 to produce one issue.

Step Two: Add how much you intend profiting from your publication and add it to your operating costs.
This is a business. You can’t charge solely on operating costs alone. You need paid, you need to invest in your company, you need retire one day, etc. These costs tend to be more flexible depending on the age and maturity of your business.

Example: You need to make an additional $5,000 profit each issue. With operation costs ($10,000), you need to make a total of ($15,000) each issue of eMagazine.

Step Three: Take your cost of producing one issue (operating+potential profit) and divide this number by how many pages of ads you want to sell.
Again, this can be tough for a starting magazine to calculate and where print has a better advantage most figure out their costs by how many copies they print multiplied by average issue reader. With an online publication, your costs can be screwy as a) page count isn’t determined by cost of print and b) ad size doesn’t play as big as a premium as your costs aren’t determined by printed realty. Once you’ve figured out this number, divide your operating costs plus your potential profit and divide it by the number of pages (advertisers) you’re intend to sell. The number of ads needed to be sold can fluctuate, also, by the market willing to pay $X for a full-page ad in your publication. You can work these figures backwards if needed.

Example: Take eMagazine’s $15,000 (operating+potential profit) divided by 20 full-page ads equals $750. This is your cost for a  full-page advertisement in your digital magazine.

Step Four: Track your readership.
I’m sure there’s some companies out there trying to authenticate digital readership, but nothing’s perfect. Most people keep track of these things via the digital publication’s hosting site. Most track the statistics of your readership… how many unique viewers, how many individual page views, which pages were viewed the most, etc.

Example: eMagazine has 60,000 readers per issue.

Step Five: Take your full-page ad cost and divide it by your readership/1,000 and now you have your cost per thousand impressions (CPM).
This last little step may seem unnecessary at first glance, but this allows your potential advertisers a better understanding of how much they’re paying for your ads compared to other advertising venues. Ad agencies and companies use these numbers to figure out their best way to reach their customers at the lowest cost. Don’t get caught up comparing yourself to certain types of media as each medium has a different way of making impressions, i.e. a television commercial isn’t seen the same way a clickable Facebook ad is viewed. There’s some online tools out there that can help you figure out the CPM if math is difficult for you.

Example: eMagazine’s full-page ad cost ($750) divided by the readership/1,000 (60,000 readers per issue divided by 1,000 = 60) equals your CPM = $12.50.

Feel free to message me with any questions you may have putting your print or online publication together. I hope this helps anyone trying to monetize their publications!

Here’s a photo I took of some fish at the Florida Aquarium in Tampa Bay. They’re so relaxing to watch!

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