What's it Worth?

From: Eric J. Aafedt <eric_at_investmenthouse.com>
Date: Mon 14 Jan 2002 13:46:29 -0500

Lloyd Jobe <LJobe_at_skateboardinc.com> wrote:

>I guess my questions are:
>
>1) Does anyone have a feel for the revenue potential of our site?

RESPONSE: With 9,000,000 page views obviously there is revenue
that can be easily generated by simply finding a "good" agency
that will place banner and tower ads for you. You should be
able to net $2,000 to $3,000+ in banner/ tower ads on a monthly
basis if you are willing to put banners on the top of your page.

Additionally, you should be able to generate a minimum of $25,000
on an annual basis by sending "dedicated email

advertisements" to your opt-in members (assuming you have
permission to do so). This revenue stream could reasonably be
in excess of $100,000 on an annual basis.

>2) Is there any "low hanging fruit" that we aren't exploiting?

RESPONSE: The dedicated emails.

>3) What's the cost to start pursuing this as a new revenue stream?

RESPONSE: Banners/towers: Actual dollar cost is zero. (I have
asssumed a 50% commission with the banner agency in the numbers
provided above). However, putting banners/towers on a site has
"costs" which can be significant which include loss of sales as
customers click and leave. And, obviously placing banner/tower
ads on such premium places (they'd have to be viewable on each
page, i.e. at or near the top) on a commercial site like yours
would take up valuable real-estate. I'd most likely guess that
the revenue is not worth the overall "cost".

Dedicated emails: (again, a 50% split is assumed in the numbers
above) -- additional costs range from $2,000 to $15,000
(including set up and monthly costs). Prices will depend on
whether you want to host / serve everything yourself (which I
would recommend) or whether you pay for such services each
month with a third party.

>4) What kind of person should I look for if we want to start
>pursuing this avenue?

RESPONSE: Don't hire anybody. Simply get an agreement in
place with a good agency for the dedicated emails (and
banners if you ultimately elect to serve banners/towers).
If you need some guidance with email delivery, let me
know, we have set this up for ourselves and for other
businesses.

>5) What industries should be on the shortlist for potential
>sponsorship deals?

RESPONSE: The agencies that you sign up will take care of this.
Let the pros do it. You do your thing, they will do theirs.

Hope this helps.
Eric
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Received on Mon Jan 14 2002 - 12:46:29 CST