Re: ONLINE-ADS>> Order conversion

Robert J. Woodhead (trebor_at_animeigo.com)
Fri, 28 Aug 1998 07:38:15 -0500 (CDT)

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jgehman_at_creativelabs.com writes:
>
>We know of people getting an $0.08 cost per click--it can be
>done. At $0.08 per click, selling one $20 tape to every 200th
>visitor will generate positive cash flow on a gross revenue
>basis. Bring your conversion rate up to the 1.2% you get from
>TV, and you should be generating solid ROI.

You need to redo your numbers. Take it from someone who sells
videos [ http://www.animeigo.com/ and http://www.videoz.com/ ],
you'll go broke quickly. If your average order is $20, and your
marketing costs are 0.08 x 200 = $16, that leaves only $4.00 for
the cost of tapes, shipping, handling, and overheads.

Spending $X to generate $X+1 of revennue only works when the
product you're selling has near zero marginal cost (as,
admittedly many net products do).

That being said, I'm always looking for clickthroughs under a
dime each; want to clue us in where you are getting them?

R

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