

How many users do you need for a 100MM / year consumer Internet product? - huangm
http://andrewchenblog.com/2011/02/26/quora-what-is-considered-a-significant-number-of-users-for-a-free-consumer-internet-product/

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corin_
It really depends on the audience as to how much you can sell adverts for
(and, of course, on how good you are at selling those adverts).

It isn't at all impossible to get $10-$20 CPM for basic standard banner
adverts, then you can charge higher rates for, as an example, video pre-roll
adverts, and you can work on bespoke marketing campaigns to complement banner
advertising, which again can provide higher profit margins.

The above is from personal experience. For example, the company I've been with
for the past few years (essentially since they decided to expand away from
being a single website) manages to employ a handful more staff than Reddit on
20m monthly page views.

~~~
melvinram
Selling adverts on a quality site is under utilizing a site in many scenarios,
IMHO.

If your ad space will be profitable for the advertiser, become your own
advertiser. Pivot to generate more direct revenue. I'm doing that on a number
of sites of mine and it's working well.

Example: Google is getting into the loan lead generation business
([http://adwords.blogspot.com/2009/10/introducing-adwords-
comp...](http://adwords.blogspot.com/2009/10/introducing-adwords-comparison-
ads.html)) and the airlines business (<http://www.google.com/press/ita/>)
because they know that by letting advertisers get access to their audience,
they are leaving a lot of money on the table.

I see their trend towards trying to get more of the pie continuing over time
to expand into banking, movie tickets, car rentals and a gazillion other
industries until they start coming close to the antitrust lines because it's a
huge source of revenue.

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akronim
In stark contrast to B2B where if you get the right niche you can be charging
a few thousand per client per month. Even one client == ramen profitable. Then
again I guess it's not as cool as having the millons of users required for
B2C!

~~~
axod
One of the things I dislike about B2B is the lack of fine grain control.

With B2C, your revenue grows over time as you grow your userbase. It's pretty
predictable, and not too risky.

With B2B, it's more binary. You might go months with 0 revenue, then get some
deal and suddenly be profitable. But then there's added risk, as losing a
single client can have a massive impact on your bottom line.

~~~
asanwal
Sorry and this may get me downvoted, but this comment shows significant
naivete about both B2B and B2C business models.

First, neither is easy. But "B2C is predictable and not too risky" is patently
absurd. It requires attracting users, keeping them and figuring out a way to
monetize them in some economically sensible way. And this is while competing
with 1000s of other services trying to attract attention as well. VC
portfolios are littered with carcasses of B2C startups that never caught on
(and those are the well capitalized ones)

With regards to B2B, I think you're describing B2B in a consulting context vs.
B2B SaaS. In SaaS if done right, you have people with a pain and with real
money to solve that pain. As a result, you don't require millions of users to
make good money.

Of course, one is not better than the other. Depends on what you know, what
gets you excited, etc.

~~~
axod
I've always found B2C advertising supported relatively easy. Perhaps I'm just
lucky at it :/ Perhaps I'm just very bad at B2B.

However, I'd much rather have a million customers paying me $1 each, than have
10 customers paying me $100k each.

But I agree with your last point. Depends what gets you excited. For me
personally, B2B is as soul destroying as it gets.

------
vaksel
those numbers are probably off...I mean reddit can be considered a very
popular consumer internet product(top 150 on Alexa)...and they just hit 1
billion page views per month, and they are having trouble paying for more than
5 people.

So if $100mm = 100 billion page views/yr. Then by that logic reddit should be
making ~12 million a year, which doesn't seem to be that case.

And that would be in addition to the subscriptions people are buying.

~~~
TheSOB88
Reddit is also terrible at business. Half the ads are 'thank you for not using
Adblock'. The founders even left it after their contract ended, so I don't
think anyone is really looking at the big picture there.

Still, your point is right. You can't just have a blanket number that works
for any site.

~~~
tansey
Demographics are also important. Reddit has a much more tech savvy crowd than
a site like twitter. I think some of the article's estimates could still hold
true for reddit, but it wouldn't be a linear scale. To reach 100B pageviews
would require breaking into the mainstream, leading to less sophisticated
users and better CPM.

------
spencerfry
Here's a link to the question on Quora:

[http://www.quora.com/What-is-considered-a-significant-
number...](http://www.quora.com/What-is-considered-a-significant-number-of-
users-for-a-free-consumer-internet-product)

------
bpeters
I like the sudden advert to Groupon lumped into the Ad-based business model.

