9 ms·

How many users do you need for a 100MM / year consumer Internet product?

58 points by huangm 16y ago

vaksel 16y ago
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 16y ago
  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 16y ago
    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.
corin_ 16y ago
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 16y ago
  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-comparison-ads.html http://adwords.blogspot.com/2009/10/introducing-adwords-comp...) and the airlines business (http://www.google.com/press/ita/ 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.
spencerfry 16y ago
Here's a link to the question on Quora: http://www.quora.com/What-is-considered-a-significant-number-of-users-for-a-free-consumer-internet-product http://www.quora.com/What-is-considered-a-significant-number...
akronim 16y ago
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!
- sudonim 16y ago
  B2B isn't as sexy, but in many cases it's a surer way to profitability, albeit without all of the magazine cover hoopla. You may not have 100 million users and burn through millions of dollars before reaching profitability.
- axod 16y ago
  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 16y ago
    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 16y ago
bpeters 16y ago
I like the sudden advert to Groupon lumped into the Ad-based business model.

58 points by huangm 16y ago

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 16y ago
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 16y ago
  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.

corin_ 16y ago

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 16y ago
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-comparison-ads.html http://adwords.blogspot.com/2009/10/introducing-adwords-comp...) and the airlines business (http://www.google.com/press/ita/ 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.

spencerfry 16y ago

Here's a link to the question on Quora: http://www.quora.com/What-is-considered-a-significant-number-of-users-for-a-free-consumer-internet-product http://www.quora.com/What-is-considered-a-significant-number...

akronim 16y ago

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!

sudonim 16y ago
B2B isn't as sexy, but in many cases it's a surer way to profitability, albeit without all of the magazine cover hoopla. You may not have 100 million users and burn through millions of dollars before reaching profitability.
axod 16y ago
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 16y ago
  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 16y ago

bpeters 16y ago

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