

The advertising equivalence principle? - mspeiser
http://laserlike.com/2008/09/14/the-advertising-equivalence-principle/

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aneesh
I wish more people would do this math before launching a startup than plans to
monetize via advertising. It's just a quick back-of-the-envelope calculation,
but I'm surprised at the number of startups that naively think they'll get
rich with Google AdSense.

One small thing this calculation ignores is that the CPM, CPC, and CPA models
shown aren't exactly equivalent. It depends on how much risk the advertiser is
willing to take. With the CPA model, there is no risk - you only pay when the
action happens. With CPM and CPC, you may get better or worse leads, so there
is some variability.

On the whole, this post makes an argument that needs to be made more often:
Have a monetization plan other than advertising.

