revenue: the internet wants to be free, but you need to get paid (andrew chen, startonomics sf 2008)
DESCRIPTION
Presentation by Andrew Chen, http://AndrewChenBlog.com, on direct (e-commerce, subscription) & indirect (advertising, sponsorship) monetization strategies for startups.TRANSCRIPT
Revenue The Internet Wants to Be Free, but You Need to Get Paid
Hi. I’m Andrew.
My life in advertising:
Revenue Science publisher clients
Direct
ecommercesubscriptionvirtual goods
brands
Indirect
adslead generationaffiliate / CPA
Direct
ecommercesubscriptionvirtual goods
brands
Transact = $$$
Transactions as funnels
Users enter
Browse
Add to cart
Buy
ARPU = average revenue per user
ecommerce ARPU• new users• % browse• % add to cart• % who buy• average order size
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• …
3 steps to max ARPU
• Identify user funnels
• Increase repeat visits
• Raise average order size
Indirect
adslead generationaffiliate / CPA
Ad impressions
Clicks
Leads
Affiliate
ad impressions RPM• CPM
clicks RPM• CTR * PPC * 1000
leads RPM• % conv * CPL * 1000
affiliate RPM• % conv * order size* 1000
Inventory modelImpressions RPM
Home 200,000 $1.00
Profile 1,000,000 $0.25
Forum 2,000,000 $0.25
Message 500,000 $0.50
Search 500,000 $10.00
4 steps to max revenues
• Grow audiences
• Higher CTR and conv %
• Advertisers
• Optimize
Direct
ecommercesubscriptionvirtual goods
brands
Indirect
adslead generationaffiliate / CPA
Questions?
voodoo [at] gmail.com
http://andrewchenblog.com
@andrew_chen