| | Author | Message |
|---|
bill  
| | #1 posted June 21, 2000 at 9:59am (EDT) |
OK, so I wanted to do some analysis regarding the feasibility of charging users who choose to pay for SC instead of having ad banners display.
So, I did a study of the top 10 people who use SC the most (load the most pages and thus see the most banners). They range between 116 and 204 page loads per day (or a 84 day range). If I extrapolate that out, assuming that average continues for the whole year (which is probably a little bogus as some users seem to drift between heavy and light usage throughout the year), and I assume that I get about $0.50 per 1000 impression from my ad service (this is actually way down from where it used to be which is distressing me, but that's another topic) I get ranges between $21 and $37 per year.
To rephrase without the parenthesis, the top 10 years of SC bring in between $21 and $37 of ad revenue each per year.
So, if I was to create some kind of subscription thing, I'd need to charge in that range in order not to lose money.
Well... maybe it's more complicated than that. Perhaps the same people who want the ads to go away would be the same people who simply never click on them. It's very likely that the reason my profit from ads are down is that my click-thru rate is also down. Thus, clearing out the "dead-weight" users might improve my click-thru rates and improve my profit per impression. ...but, that is rather speculative.
-bill | jonathan
| | #2 posted June 21, 2000 at 4:46pm (EDT) |
I disagree w/your assumptions re: how much you'd need to charge. The problem is a bit more complex than that for a couple of reasons.
Markets, not money: Your revenues are really being driven by two things: usage by users, and growth in the number of users. So you want to find ways to drive up the average use per user (for users who aren't paying a subscription fee), and grow your user base. Your most valuable users are not necessarily the ones with high usage, but are the ones who drive up the average use per user (i.e. by creating interesting surveys & comments that people will want to read) and/or ones who bring in new users. Identifying those users and offering them perks or something could help your revenue stream more than a flat-rate subscription would.
Relative values of customers: In looking at the top 10 users for average use by user to see what you'd need to charge so you wouldn't lose money, you're missing the fact that there's the "average" user who might be making a lot less money for you on a per-ad basis than the high-usage user, but who you could charge more for the subscription service. AT&T's TrueUSA plan is an example of this, $2.95/month for 20 minutes of "free" calls and then $0.10/minute after that or something like that. AT&T did the research to figure out that the average customer made less than 20 minutes of calls, so that they're making a bunch off of all those customers who sign up for the plan and don't use their free usage allowance, and making a decent profit off the customers who are using more than the 20 free minutes.
So in doing a flat rate plan you might lose a bit on the high usage users, but their value in driving other users' usage might very well offset that "loss."
If you want to talk more on this Bill, send me email or give me a call. I used to develop and analyze rate plans for assorted online services back in my Kenan/Lucent days.
jonathan
| Gamera
| | #3 posted June 23, 2000 at 3:10am (EDT) |
I'm afraid I didn't really understand how you could apply what Jonathan said to SC, but that's okay. I'd definitely pay up to $10 and would consider paying between $20 and $25 (I'd be more likely to do so if the boring survey rate went down).
I do think, that if I didn't have to wait for the ad to load each time, I could see more surveys and take a more active part in SC again. I have no idea how that kind of thing factors into your modeling, either.
My telling you what I would pay is just for your informational use, not to try to convince you of a value or a price. I notoriously suck at accurately estimating the value of my own services right now, and wouldn't even pretend to know how you should value yours. best wishes on this comlicated question. | cody
| | #4 posted June 26, 2000 at 5:41pm (EDT) |
Hmm, well, I dont know if increasing your user base will have a positive effect on the amount of $ coming in, but if it will, then I sugest you get into a banner exchange type program with another survey site. |
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