I think ultimately it has got to come down to how long it takes you to design these ads, no point charging £20 if it takes you hours. So think you should work out what you think is an hourly rate your comfy with and work ot from there.
What i normally do is find out what the client is looking for and show them a few examples of previous work.
Once they have made up their mind about which design they are going with i then ask for 30 - 50% ( dependant on what print will cost me), then the remainder at the end of the job.
Most clients have been happy with this arrangement as it safegaurds both parties agaisnt the other coming up short.
