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If the site has less than stellar demographic information, this is something you’ll have to really do your research on.  Again, I would suggest using Google Ad Planner, Alexa, Compete and Quantcast to find out these demographics.  Hopefully your contact will be able to provide you some demographic information, but as I said, this isn’t always the most reliable source.  I would use all 4 of the sites I mentioned previously to try and get a good idea of what the demographics for the site you’re interested in are.

When it comes to price, there are four different options, one I’ve never heard of being used on direct buys and the last one I’ve never tried.  The two that I’ve tried are CPM and flat fee for a specified amount of time, for example $500 per week.  I’m sure pretty much every body has had experience with or knows what CPM is.  You’re paying a priced based on 1000 impressions.  If you’re going this route, you want the highest CTR possible so that the clicks you receive are as cheap as possible.  If you do the flat fee, it’s a lot easier to manage, as you’re not constantly worried about your CTR; however you still want it as high as possible.  Another way, I assume, you could buy banner inventory is using the CPC model, but I haven’t seen this done, but I guess its possible. This method would have you paying for every time that someone clicks your ad.  The final way to buy banner inventory, which is quite interesting to me and was suggested by a reader of my blog, is by doing a performance-based deal.  This means that for every action, sale or lead, that takes place, you agree to send him a percentage of it.  So the only costs out of your pocket will be for the impressions served by your ad serving platform.  If this is the case and the webmaster wants complete transparency, you may have to clone your affiliate account in case he ever wants to login himself.  This could create some problems though, he may figure out what you’re doing along the way and just cut you out and steal your creatives.  So proceed with caution using that last model.  If anybody has done this before, please post in the comments how it worked out for you.

Usually on my first buy for a particular site, I’ll let them know that I’m interested in buying some banner inventory to see how it performs and if it does well, that I would be interested in purchasing a lot more banner inventory in the coming weeks and months.  I’m not much of a negotiator, so my first buys are usually at their quoted CPM, but I always make sure to drop the line that if it backs out for me, I will be interested in purchasing much more inventory on their site.  That way when the second time around comes, I’ve always found it easier to negotiate down the CPM or fee that I’ve agreed to.  I’ve even been able to negotiate further down on my third and fourth time buying banner inventory because I now have a proven track record of buying banner inventory.

Whenever you’re talking to your contact, be sure to clarify which placements on the site your banner will be showing up in.  Always try to get your banner above the fold!  Sometimes they’ll replace the Google Adsense code with your banner tags, sometimes it’ll show up in a different place, so be sure to figure out where your banner will be showing up.  This is often the reason for a huge CTR difference between doing a targeted placement on Google Adwords and doing a direct buy.  This is something you’ll want to specify when signing your insertion order.  Also on your insertion order make sure you clearly agree on how and when your banners will be shown.  For example, if you only want your banners shown during certain times of the day and do you want your impressions served as quickly as possible or spread throughout the alotted time.  Additionally, you will want to indicate on your insertion order what the frequency cap is.  If the frequency cap is 3 per 24, that means that each user can only be shown your banners a maximum of 3 times per any 24 hour period.

Never forget to ask about the out clause.  Just for clarification, because I was confused when I first heard about an out clause, an out clause is the amount of time your contact needs to shut down your placements on their side.  The most common out clause I’ve come across is 48 business hours.  That means if you told your contact this isn’t working for me, I need you to stop it on Wednesday, it’ll be Friday when your placements stop running.  However, if you notify them Thursday or Friday, your placement is most likely to run throughout the weekend, losing you money, before they stop it on Monday or Tuesday.  So keep that in mind.  The out clauses are negotiable, so don’t be afraid to ask.  Everything is negotiable!  Sometimes you just can’t find a winning campaign for that particular traffic source and you will have impressions still left on your insertion order.  Ask your contact what happens with this money should you run out of things to run.  Can they refund this money?

A topic that I hadn’t thought of before, but Smaxor pointed out to me is how you manage the money on your buys.  How do you track who you’ve sent money to and who you owe money to.  I didn’t think of this because I always prepay my buys to keep everything simple.  And on a lot of sites, they will want you to prepay your first buy.  Most buys that I’ve come across want a minimum of a $5,000 monthly spend, but you will come across some that don’t require as much money.  Some sites will even let you fill out a credit reference sheet so you can build credit with them and pay them monthly, which is where Smaxor‘s question comes into play.  I would guess that Excel would work for this, but to each their own.  If you have any suggestions on how to handle your finances, please post it below!

Next: Profit!