Most bloggers will agree that rather than signing up for the ad networks, actually doing the work yourself, contacting the advertisers and selling your real estate is more powerful as a money earner. It’s obvious; no one else is taking a percentage of the price. The downside is that now you have to figure out how to get these advertisers.

So how do you attract someone when you are just starting out?

You need to build your blog to a certain extent in order for it to be attractive, if you have 12 visitors a month, No one is going to want to pay much for space. So the trick would be to boost your numbers first. Advertisers are paying for exposure. You’ll have to figure out how to get those numbers before you will be interesting to most.

Always consider having a media kit on your site for advertisers to look at. It increases the conversion rate for every attempt you’ll make on selling a slot. Media Kits are complete information packages about you, your blog, its demographics, and its current statistical data.

You should always have a page set up for advertisers to look at regardless of whether you have a media kit or not. The page should contain the sales and payment information for instance. I suggest putting a price chart on there as well. Let them know from the start what they are buying and for how much.

But there is more that you can do than just having a media kit, tricks that you can apply that are powerful, simple, and most of all effective.

Start by setting yourself up right. Make some space for your ads, Find the placements you want to sell and create the areas for it. You really need to have something before you can sell it. Find out the most common Banner sizes; pick the ones you think will fit well with your current layout. Don’t just slap oversized ads on your blog, it looks unprofessional and it will cost you sales.

Now, you can consider the “your ad here” blank ad space linked to your information page. But I would not recommend that in case you don’t have other ads up already. It looks unattractive to an advertiser to be the only one buying the spot. If no one else is, why should they? Never have just that space on your blog, it tells people that no one wants to advertise there.
Instead of the blank space, use The “You’re Losing Business” trick

Find a company that advertises on blogs like yours, and simply copy the ad to your spot. If you choose wisely, they normally won’t mind the extra exposure, and you’ll appear to have advertisers.
Pick wisely, because you are going to use the ad to sell it to other people in the same industry. Showing them that their competitor is getting exposure and that they can either “buy them out” or get a spot next to it.

As soon as you have sold some other spaces, you can contact the company you gave free publicity to, and show them the data. How many hits you generated etc., and ask them if they are willing to continue the exposure. Don’t forget to tell them what competitors of theirs you are branding at this time.

Advertise yourself or your Friends

If you feel uncomfortable with that, just create ads for other sites that you or friends own. Anything is really better than nothing. Again, no one wants to be the first. It’s always better to appear to be popular in a popularity game.

A third option, and perhaps the most ethical is to contact the companies that you feel make a good target for your advertising, and offer them a free trial. Once that trial is about to run out. Contact them and try to sell them on continuing based on the numbers you have already produced.

Either way you want to do it, remember that before you have substantial numbers. You won’t be getting much income. Once that happens, advertising sales can be one of the most rewarding ways to build a steady income.

How to Price

Determining how much you should charge for ad space is the hard part. A very simple way to determine this is to Use AdSense “channels” to help you out.

If you want to sell a 125×125 spot. Put an AdSense button there assigned to a specific channel and see what it generates. Then I would suggest a decent starting point would be to add 25% to that income for a fixed ad. In other words, if your AdSense earned you $1 dollar in a given day, then sell it for $1.25, and do a little simple math.
Week = $1.25 x 7 = $8.75 - sell it for $9 per week.

Start reasonably low, Its better to undersell your opposition and make a little less, than getting nothing. Instead of worrying about if you could be making more, remember that before your first sale, you were making nothing. Take your time, build you business with good planning, one step at a time. You’ll be better off in the long run.

Digger wrote very good article on how to calculate your prices once you get your feet wet. Where you’ll also learn a lot about how to calculate long term discounts. A strongly suggested read.
Check it out here. A Calculator For Properly Pricing Your BlogAds And Sponsorships