UKNM: Re: UKNM Digest V1 #383

[Charles Linn]

 >

From: "Ray Taylor" <rayeyeconomy [dot] com>

 > Subject: Re: UKNM: pricing

 > If you are looking at building a revenue stream through advertising,

please

 > take careful note of the following advice - reduce all your estimates by

at

 > least 90% at each stage. Almost every development "funded by advertising"

I

 > have looked out has chronically over-estimated the revenue potential from

 > banner advertising and underestimated the cost and difficulty of selling

 > impressions.

 >

 > Unless you are in the media business, banner ad sales should be considered

a

 > bonus against other revenue streams.

 >


I'm sure that this is true, and that banners are hard to sell and that lots

of people overestimate their potential, but I am also intrigued by the

following:


A friend of mine who works for a large contract publishing house have a web

property, which has about 700,000 page impressions a month, and they sell

all of the inventory at rate card of �20 CPM, much to my surprise.  The site

does not currently make money, but it is not far off.  If they had 50% more

pages (hardly an ambitious target), then they would be making money.

Needless to say that site makes money for the holding company hand over fist

in share prices - plus ca change!  What I would like to know is how

prevalent is this situation of;


1. Selling all you inventory at rate card or very near

2. not having enough page impressions

3. nearly breaking even


Looks like the future could be rosy for the advertising model after all.

Needless to say I have a few suggestions for this friend as to how to build

his traffic, which will be exchanged for a few beers.


Cheers


Chas 



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