lingolook.com

The way things work

Posted by Michael Walsh (Check me out!) on March 21st, 2007
Tagged as: Gab Gab Gab, Internet Marketing, Problems

Jeremy Wright’s response to allegations that there’s no money in advertising is seriously worthy of note for anyone planning on setting up an online media company (like me).

If for nothing else, it was a real eye-opener for relative newcomers, again like me, on the mechanisms used to generate income from similar projects.

Remember I’m the creative one. I’ve got the idea in my head and am working on ways to implement it, yet people with hands-on knowledge of revenue streams are way ahead of me in this field.

What was particularly interesting for me was the part where Jeremy wrote:

They (Jeremy Liew’s figures) don’t hold true if:

1. You do more than 25M AdSense impressions per month (you get a better cut, exclusive deals, etc).
2. You work with a boutique ad network (like Federated Media).
3. Are able to get some remnant inventory providers (which can go from 0.50-2$/unit CPM, giving you an RPM of 1-4$ with just 2 units per page).
4. You do any non-performance/metric advertising (like sponsorships).
5. You do text links.
6. You have any internal sales team at all (which’ll sell those 1$ units for 2-5$, giving you an RPM of 4-10$ on even the most generic traffic).

He went even further:

1. For generic traffic, expect a 3-5RPM. To get to 50M$/year in revenue would thus require 800 million pages per month.
2. For demographically specific stuff, expect an RPM of 12-15. You’d need about 300M pages per month.
3. Huge in-demand areas like cars and sports can net you an RPM of 40-50. You’d thus need about 100 million pages per month.

Now that’s not to say these numbers are easy. But a media company that balances the above 3 properly, does sponsorships, syndication deals, content licensing, text links, feed ads, etc could potentially achieve 50M$/year in revenue on about 200 million pages per month.

The mechanisms at work here make fascinating reading. Sponsorships, syndication deals, content licensing, text links and feed ads are all relatively new business areas for me, but seeing as the project I’m toying with would be used extensively by universities and international business groups, it should be one of the first things I look at.

But it isn’t. I’m the creative one, remember? I just put two and two together and came up with over a million subscribers.

Maybe I should just give Jeremy a call…

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