Jay Weintraub, Startonomics LA

24
Revenu e The Internet Wants to Be Free, but You Need to Get Paid

description

Jay Weintraub on how to generate revenue and monetize your website at Dealmaker Media's Startonomics LA Conference on Feb 6/09

Transcript of Jay Weintraub, Startonomics LA

Page 1: Jay Weintraub, Startonomics LA

Revenue The Internet Wants to Be Free, but You Need to Get Paid

Page 2: Jay Weintraub, Startonomics LA

How I Got Here

Andrew Chen

Page 3: Jay Weintraub, Startonomics LA

How Online Companies Make Money

From Ads

CPMCPC

CPA / affiliate, leads

From Users

ecommercesubscriptionsvirtual goods

Page 4: Jay Weintraub, Startonomics LA

From Users

ecommercesubscriptionsvirtual goods

Page 5: Jay Weintraub, Startonomics LA

The Basic Model

Page 6: Jay Weintraub, Startonomics LA

Transactions as funnels

User enters

Browses

Adds to cart

Buys

Source: Andrew Chen

Page 7: Jay Weintraub, Startonomics LA

ARPU = average revenue per user

ecommerce ARPU• new users• % browse• % add to cart• % who buy• average order size• * frequency of

purchases

virtual items ARPU• new users• % register• % buy currency• purchases/month• average order size• churn %• month2 revenue

subscription ARPU• new users• % register• % subscribe• month1 revenue • (1-churn %) *

month2 revenue• …

Source: Andrew Chen

Page 8: Jay Weintraub, Startonomics LA

Maximizing ARPU

• Track, track, track• Understand user funnels– Increase repeat visits– Increase visit to purchase ratio, etc.

• Lower threshold for purchase (“Freemiums”)• Raise average order size• Close off any holes

Page 9: Jay Weintraub, Startonomics LA

From Ads

CPMCPC

CPA / affiliate, leads

Page 10: Jay Weintraub, Startonomics LA

Advertisers Publishers

Risk

CPM

CPC

CPA

CPM

CPC

CPA

Understanding Risk

Equal Risk. Not surprising CPC became dominant pricing method.

Page 11: Jay Weintraub, Startonomics LA

Calculating Revenue Per Thousand (RPM) –

The standard unit for measuring ad revenue

• Fixed Price Ad ImpressionsRPM = CPM (Cost Per Thousand Impressions)

• CPC Based Ads(CTR * PPC) * 1000

• CPALead based: ((CPL * # leads) / Imps) *1000Sale based: ((Gross Revenue * Rev Share) / Imps))

*1000

Click Through Rate (CTR) - Clicks/Impressions * 100 (%)

Page 12: Jay Weintraub, Startonomics LA

What Will It Take to Win?

• # users• user growth• activity of users• content• no more me too’s

Page 13: Jay Weintraub, Startonomics LA

No One Said It Was Easy

• SEO Publisher of Lyrics• Low Value Content• 16 Different Ad Spots• Spans Thousands of Pages

Page 15: Jay Weintraub, Startonomics LA

Monetizing Your Inventory

Option Pros Cons

In-house Sales Team Better Rates, Full Control Pricey, Need Staff

Ad Networks Quick set-up, Great Reporting Limited Ads, No Guarantees

Ad Sense Strong Adv Base, Solid Yields Restrictive Terms, Ad Crack

Affiliate/CPA Programs Flexibility, More Integration Options Hit or Miss, More Manual

Page 16: Jay Weintraub, Startonomics LA

Maximizing Ad Revenue

• Test, Test, Test• More eyeballs• Increase CTR and/or Conversion Rate (CVR)• Focus on quality / value to advertiser• Automation / technology

Page 17: Jay Weintraub, Startonomics LA

When East Meets West

From Ads

CPMCPC

CPA / affiliate, leads

From Users

ecommercesubscriptionsvirtual goods Ad Payment

Platforms

Ads Instead of $

Page 18: Jay Weintraub, Startonomics LA

Ad Payment Platforms

Page 19: Jay Weintraub, Startonomics LA

Users Want Something

The Problem: They Don’t Want To Pay with Cash

Social Media Apps

Software The Solution:They Will “Pay” Through Ads

Movie Tickets

Source: Trialpay.com

What Is It

Page 20: Jay Weintraub, Startonomics LA

Social Media – App Developer

Flow

Digital Goods – Consumer Proposition

Source: Trialpay.com

Source: OfferPal Media

Source: Super Rewards

Social Media - Integration

Page 21: Jay Weintraub, Startonomics LA

Maximizing Ad Platform Performance

• Test Among Platforms• Tweak Offer / Point Matching• Integrate Look and Feel• Push for Margin• Focus on The Value Proposition• Track Performance Carefully

Page 22: Jay Weintraub, Startonomics LA

Mix And Match

From Ads

CPMCPC

CPA / affiliate, leads

From Users

ecommercesubscriptionsvirtual goods

Ad Payment Platforms

Ads Instead of $

One Style Does Not Fit All

Page 23: Jay Weintraub, Startonomics LA

Questions?

Jay Weintraubjay.weintraub[at]gmail.comBlog: jayweintraub.com@jayweintraub@leadscon

Page 24: Jay Weintraub, Startonomics LA

Four Factors Affecting RPM

Impression Count/Person

RPM

# Impressions Targeting & Placement

Level of Targeting

RPM

# Advertisers

Advertiser Base

RPM

Content / Ad Relevance

Relatedness

RPM