

SaaS vs. Advertising based business models  - faulkner8
http://savagethoughts.com/post/1167218353/whats-the-cpm-of-my-saas

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il
This post makes so many wrong assumptions I don't have time to mention them
all. Here are a few:

1\. SuperAwesome makes $0.50 CPM from that one ad unit(probably a small
rectangle). I'm sure they have multiple ad units on each page, so their actual
CPM is probably closer to $3-$4, maybe more.

2\. The post does not take into account traffic quality or market size
whatsoever. Maybe there are a million people interested in reading
SuperAwesome content but only 40,000 people interested in your SaaS.

3\. Most importantly, it's probably a lot easier for SuperAwesome to get their
traffic, because they are a large content site and get traffic for free. If
you're selling a service, unless you have a very popular blog or excellent PR,
you(and your competitors) will probably need to buy most of the traffic you
get.

I hate to tear apart someone's blog post, but this one is just plain wrong. I
would much prefer post based on real data and not a slew of assumptions.

EDIT: I'm going to guess SuperAwesome is dafont.com, here's their BSA page:
<http://buysellads.com/buy/detail/8441>

It was easy to find because on many sites on BSA have 7 million impressions
and 0.50 CPM. This is a terrible example- font/graphic sites are notorious for
having low quality, hard to target traffic from all over the world and many
pageviews per unique visitor as they look at different fonts. That's the
reason they're selling impressions for a low CPM, it is not representative of
most content sites or blogs whatsoever.

~~~
csavage
Hey il,

Thanks for your feedback. The purpose of the post is not to say that one way
is any better than the other. I was thinking about the differences between the
two types of companies and trying to come up with a way to describe these
differences.

You're right on that in general it's easier for a content site to get traffic
then for a product site. But as you point out, a product can pay for traffic.
Some would see the very fact that they can pay for traffic is a major
advantage. Just my two cents here.

That said, your assumptions of my assumptions are also off. The 7 million
impressions was the total number of impressions across different ads. That
means that the site gets less that 7 million pageviews total. For easy
comparison, I left this as is.

