“I’ve got lots of users, I’m going to start making lots of money soon!”
I hear a lot of new businesses talk about how much money they will make when they get big through advertising but I’m not sure they realise just how big you have to get before you make any serious money. This is really true of SocApps (Social Network Apps) which promise fast and big acquisition and lots of page views.
I’m working on a calculator for this but in the meantime here is the quick ‘back to earth’ maths.
Update: I finished it. Well, the Pollenizer developers finished it.
Web Business Revenue Calculator
Customers = 10,000
x
Visits per month = 4
x
Pages per visit = 3
x
Ads per page = 2
x
Effective Nett Revenue Per 1,000 ad views (ECPM) = $0.80
= $192 a month!
Buy that BMW now! $192 won’t pay for your servers….
The divide by 1,000 in the ECPM is the killer. 80 cents per 1,000 ads. Sheesh.
Don’t not go for it, but just realised that big needs to be BIG to get a good return.
Popularity: 29% [?]
3 responses so far ↓
1 Mick // Apr 27, 2008 at 4:00 am
Here is my latest billion dollar web app.
You can use it to check your maths and see if your new business idea will make you enough to retire on or just enough to pay for the servers.
http://www.pollenizer.com/bmc/calculator/
2 Phil Morle // Apr 27, 2008 at 5:24 am
Nice one. Clearer if ‘users’ label said ‘Active Users’? Otherwise the revenue is very inflated.
3 Mick // Apr 27, 2008 at 6:31 am
But visits per month per user should average that out.
e.g. If I’m counting total visitors, then the average visits per month will be low.
But if I’m only counting active visitors then the average visits per month will be high.
It’s part of the magic of my record breaking formula. It took 3 PHD’s but I think you’ll agree it was worth it.
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