

Value of a social network user - maxer

how do you put a value on the user of a site such as facebook? or even more so on plentyoffish.com? I'm number crunching a marketing strategy for a startup and wondering where i could find information on the return per user for big name sites? or is this confidential?
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tjic
You're basically asking "What's the net present value of the user?".

Let's say that the average user clicks 1 ad per day, and you get 5 cents per
click, then each user is worth 5 cents per day. 5 cents * 365 = $18.25 in
revenue per customer per year.

What's your cost? If you're paying $300k / year in salaries, Red Bull, website
hosting and office rent to support a website that can handle 20,000 customers,
then the cost per customer per year is $15.00.

...so your profit is $3.25 per customer per year.

What's the churn rate? If an average user lasts 2 years, then you're getting
$6.50 in total profit per customer.

...except the profit for year two should be "discounted" by some factor
(inflation, opportunity cost, risk, etc.). Call the first year $3.25 and the
second year $2.50, perhaps.

So: a new customer is worth $5.75.

You can see all of the variables I used above - feel free to substitute your
own numbers in.

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eatenbyagrue
Start at your planned 'revenue event' and work your way backwards to your
expected traffic volumes.

For example, if you have a plan to build a site with users and content, and
your revenue plan is to sell T-shirts;

\- What percentage of checkout pages will be completed?

\- What percentage of tshirt page visitors will click the 'buy now' button?

\- What percentage of site visitors will click your promo to view the tshirt
page?

\- How often will your users visit your site?

\- How many users will you have?

Selling Tshirts isn't the best revenue model, but you can follow these steps
to build a model for anything.

