

Page views required to generate $1M in ad revenue? - thinkzig
http://www.microsoftstartupzone.com/Blogs/the_next_big_thing/Lists/Posts/Post.aspx?List=6bab7b08-81ca-4602-bd97-4b7b2c893e88&ID=675

======
russell
300 million in page views net $15K in revenue. Not a business I want to be in.
Google makes a very nice living because people who are googling are looking
for information and the ads provide links to information. People who are
socializing are not looking for something, they are already there. Most of the
time the ads are even below the level of annoyance. (Mouseover videos are
definitely over the threshold.) CPC vs CPM doesn't address the issue. Radio
and TV ads work because you cant avoid them. Print ads works because people do
scan newspapers in search mode.

The real issue is how to engage people when they are socializing. The
advertiser needs something more engaging the current social event. Sex sells
and flash sells, but the post is talking about something beyond that. I dont
think target advertising is much more than the same old same old, but more
refined. The break through will be something that enhances the social
experience.

Maybe something like a chat about Paris brings up a live feed of a Paris cafe
complete with tables for your avatars, with an urchin trying to sell you a
travel guide. Whatever it is it needsto be engaging an not annoying.

~~~
vaksel
pretty bad example, considering the people might be chatting about Paris
Hilton.

~~~
jasonlbaptiste
pretty sure sites like perez hilton are getting great CPMs and advertising
offers. It may be annoying/not to your liking as a site owner, but tv shows
"reskin" the site on premiere nights. That costs a pretty penny.

~~~
fallentimes
You're right - Perez Hilton is making an absolute killing:

[http://web.blogads.com/adspotsfolder/ba_adspotsfolder_revisi...](http://web.blogads.com/adspotsfolder/ba_adspotsfolder_revision_create_shortcut?persistent_uid=3e759f53402fc5bafd783046580df71f)

[http://web.blogads.com/adspotsfolder/ba_adspotsfolder_revisi...](http://web.blogads.com/adspotsfolder/ba_adspotsfolder_revision_create_shortcut?persistent_uid=2bf3ca8b27a840dd60c8a1170cc175aa)

And there's multiple occurrences of those ads. 40k-75k PER week isn't that far
of a stretch

------
pmorici
What sites like Facebook and Twitter need to do is infer peoples needs from
things that are happening to them in the moment. For example, if a user posts
to their feed "My POS car broke down" They should be shown ads for new cars,
repair shops, car rental and AAA. If a FB user invites 30 of their friends to
a Halloween party they should all be shown ads for costumes and other related
things.

FB and Twitter have the ability to preempt Google because they could predict
your needs from your updates before you even know them yourself. As it stands
though Facebook advertising strikes me as being about as effective as putting
up a billboard on the side of a highway.

~~~
seldo
For certain types of advertising, I think Facebook's ability to target by
demographic must make it significantly more cost-effective (and hence popular)
than keyword searches -- products for a particular age range, or relationship
status come to mind -- despite the lack of intentionality (i.e., a keyword
search is somebody looking for something, but a Facebook user is not).

------
staunch
> _But, based on a survey of social network sites let's assume an average CPM
> of $0.40. You would need 2.5 Billion page views per month to earn $1M in ad
> revenues. That is 2,500,000,000 page views...and how many sites can sell out
> all their page view inventory?_

This makes the mistake of assuming that one page impression = one ad
impression. That's not the case on most sites. Most sites can quite easily
have 2-4 ad impressions per page impression.

Also, it's not hard to sell out ad inventory at ridiculously low CPMs. There's
always _someone_ willing to pay _something_ for a genuine ad impression. Most
sites can probably sell a little bit of their inventory for a high CPM and the
rest for a very low one.

------
pjhyett
Trying to make that sort of money using something like an Adsense program is
going to take a hell of a lot more pageviews over having a sales force capable
of selling high-dollar ad packages.

That isn't to say that sites like PlentyofFish haven't been able to do it, but
your CPM has to be fairly high if you're not getting billions of pageviews a
month.

Sourceforge doesn't get nearly the level of traffic that Facebook does, but
they brought in $5.4 million in media revenue from 36 million uniques in their
first fiscal quarter of '09[1].

1\. <http://www.globenewswire.com/newsroom/news.html?d=155376>

~~~
int2e
Be careful not to confuse uniques with impressions.

Assuming 10 impressions per unique, that's still a very respectable CPM of
$15.

~~~
pjhyett
That's the point, though, $15 CPM is enormous compared to the article's claim
that the social network average is 40 cents.

~~~
jacquesm
I can confirm that claim.

This is over a sample of about 3 million uniques / month.

------
lallysingh
Hmm, not even counting the cost of content creation, how much is it going to
cost to produce 1M in ad revenue?

They mention 2.5 billion views for $1M. Being very, very conservative in data
transfer, that's several terabytes a month. 4k/page is 10 TB (3.858 MB/sec
sustained for a month), 32k is 80 TB (30.864 MB/sec for a month), etc. A
single banner image off of gamasutra.com (not even flash) was 149k.

The netlink, server hardware, and infrastructure (bought or rented ala
rackspace) isn't exactly cheap.

~~~
diego
This is highly dependent on what your site does. If you could somehow get that
much traffic on a blog, the cost of bandwidth and servers would be very low
(tens of thousands at the most, say 5% of your revenues).

On the other hand, if every page view is extremely heavy with a long tail of
uncacheable content (e.g. Youtube) or computationally expensive (web search
engine), then bandwidth and servers become a significant percentage of the
revenues.

------
pmichaud
I think it's pretty clear that the best way to make money from a site is to
sell things. For money.Crazy, I know.

~~~
netsp
A good way of making money is to sell things. But that is a way for a business
to make money, not a site.

It has never completely gone away, but there was a time when instead of having
ads, people thought sites should have shops. Newspapers would have shops. Sell
mugs and pens. A lot of sites like news sites actually added them.

This idea never went very far.

Facebook and the like are here to stay n the internet. Even if Facebook itself
goes out of business, it will be replaced. They are not a store. They do not
magically turn their visitors into Amazon visitors by selling stuff.

~~~
froo
_"This idea never went very far."_

Well, not to burst your bubble but there are many sites that use this exact
business model.

One of the sites that comes to mind is homestarrunner.com - who have been
doing this since they started.

Granted, it doesn't work for every business, but the fact is that if you
create a service that your users _genuinely_ care about, they will purchase
your merchandise, because for those users, this enhances their overall
experience.

It's a classic model that's taken straight from hollywood. Merchandising
revenue is a HUGE factor in lots of productions.

~~~
netsp
I never said sites don't have shops.

I'm saying Facebook are not going to monetise by adding one.

------
brc
Google CPC works because it ties in buyer behaviour with advertisers. The
solution to driving revenue from pageviews must either connect up existing
behaviour with advertisers (where can I buy an X), or create a compelling new
behaviour. For example, in the early days of newspapers, it wouldn't have been
obvious to look in the back for classified ads, but buyers learnt this and now
know to look in the back for the ads.

The power in social networks is the group of trusted friends. I'm sure some
sort of group question along the lines of 'do you guys think I should buy an
LCD or Plasma TV' with voting, or something similar, would develop new
behaviours, particularly amongst consumers of products they aren't completely
familiar with (anything from cars to financial products). Once you develop
this behaviour in a social network, selling ads into it is a cinch.

------
eli
Uh.. audience matters. Like, a lot. If you think all impressions are equal,
then you will only be able to attract lowest common denominator advertisers
who will only pay you commodity prices. Why do you think washingtonpost.com
has ads for asbestos lawyers?

If your site is for luxury yachts owners, or people looking to buy Enterprise
CRM systems, or is specially tailored to Fortune 1000 CEOs, you can charge
CPMs that most sites only dream of. With a dedicated ad sales staff You could
probably clear a million with a few hundred thousand page views a month.

------
heed
The thing that is difficult about ads, not many people like to be told what to
buy. And I think it might be the ads themselves that are lacking, not
necessarily how they are delivered.

For example, look at this award winning Pringles online ad:
<http://awardshome.com/cannes2009/pringles/can-hands.html>

The reason why this one is great, is because it isn't pushy, it has humor, and
it uses normal, honest language that we can all relate to. Maybe it's these
type of ads that need to be displayed in the social networks.

~~~
il
Your comment is so very incorrect.

It's not that _ads_ as a whole don't work, it's that untargeted, random banner
ads are very ineffective at driving conversions.

Ads on search, which frequently tell you what to buy, and don't have room to
be artsy of humorous generate billions of dollars for Google and probably much
more than that for its advertisers. I wouldn't be surprised if Google gets
$20-$100 CPM on its pageviews.

Award-winning ads are frequently not the most effective. The most effective
ads are often bland, boring ads that tell you what to buy but take into
account segmentation, positioning, targeting, behavioral trends, and so on.

~~~
heed
I don't think a downvote was warranted here, but do what you may.

Could you provide a source to your last sentence? I'd like to read more about
this. Thanks.

~~~
jimboyoungblood
Take a look at any trade magazine or other specialty publication. In general
the ads you'll find there have very low production values.

Award-winning ads and creative branding are necessary when trying to sell
highly undifferentiated, commoditized products (e.g., potato chips). But if
you have a product that is obviously differentiated from the competition (a
laptop with 100 hour battery life, an electric sports car, etc.), informing
consumers of your existence is often enough.

~~~
imp
I got the impression that ads in specialty publications and trade magazines
only have low production values because the companies advertising have small
budgets.

------
Ardit20
Last time I analysed revenue from ads per visitor the figure was between
0.0025 and 0.004, so 1000 views means 2.5 dollars at the low end or 4 dollars
at the high end, so maybe the problem is limited to social networking sites
alone. How can they make money? Perhaps freemium is the best way? I mean these
people, well some of them, well most of them are addicted to Facebook and all
the rubbish in it such as quizzes and friend poking, so if it costs say £2 to
I don't know, send your friend the perfect girl questionnaire, sure some
people will pay and if it goes hot and viral then all of them will pay, they
have to.

~~~
bmelton
Where are those numbers from?

~~~
Ardit20
just my own website

~~~
NonEUCitizen
which ad provider do you use?

