Re: Is the internet a "good" place to do business?

From: Ivan Weltman <ivan_at_tudogs.com>
Date: Mon 03 Dec 2001 10:17:11 -0500

ANDY BOURLAND <andybourland_at_yahoo.com> WROTE:

>Fundamentally, in the businesses we are running, we need to
>be delivering some form of value that SOMEONE is willing to
>pay for -- either the readers, or the advertisers/sponsors or
>some other party.
>
>The big issue related to advertising is whether as publishers
>we're delivering value to our advertisers. The CPA/CPM debate
>centers around what is the most appropriate way to charge for
>the value delivered.

No. I don't think so. The big issue is whether we are
delivering value to our site users. If our reason for being in
business is to make a profit, we'll probably fail. If it is to
provide a defined service to a defined community, with profit
the incentive, we have a chance to succeed; providing our
offering is unique, and satisfies a need for a sufficient
number of people.

Let's face it; it's time to bite the bullet. If people are not
prepared to pay to use your (content) site then your site is
worthless unless it's a public service. If they are prepared
to pay, then so will advertisers, thus reducing the cost to
your users.

Remember the days when we could get $35 CPM? We were lulled
into a false sense of security, and stopped thinking!

So look at the numbers. Say you deliver ten million
impressions a month - already meaningless - so let's say the
average user visits four pages, and you have 2.5 million
daily unique visitors a month. Still not good enough,
as some will come back more than once during the month. So
lets reduce it to 2 million unique users a month, and reduce
this to 1 million unique users during a year.

If you sell CPM and average $0.50 over your total inventory
of 10 million impressions a month, you'll gross $60,000 a
year, and that wont keep you going for long!

Now lets say you charge a modest $50 a year subscription fee,
and only 1% of your 1 million annual unique users think it's
worth it, you'll get $500,000 a year. These numbers, of
course, are illustrative, but make the point.

Ivan Weltman
http://www.tudogs.com







Received on Mon Dec 03 2001 - 09:17:11 CST