Andrew Chen: Revenue: The Internet Wants to Be Free, but You Need to Get Paid by Startonomics

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									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
ecommerce subscription virtual goods

Indirect
ads lead generation affiliate / CPA

Direct
ecommerce subscription virtual goods

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 • subscription fee • (1-churn %) * subscription fee • …

Funnel profitability dashboard
Source % browse % cart add % buy Avg order ARPU

SEO
Adwords A

20%
40%

50%
40%

20%
20%

$50
$25

$1.00
$0.80

Adwords B

40%

40%

20%

$50

$1.60

3 steps to maximize ARPU
• Funnel profitability by traffic source • Revisit rate % • Average order size

Indirect
ads lead generation affiliate / CPA

Impressions
CPM

Clicks
CPC

Leads
CPL

Affiliate
% of order

ad impressions RPM
• CPM

leads RPM
• % conv * CPL * 1000

clicks RPM
• CTR * PPC * 1000

affiliate RPM
• % conv * order size* 1000

Inventory revenue dashboard
Section Home Profile Forum Message Search Impressions 200,000 1,000,000 2,000,000 500,000 500,000 RPM $1.00 $0.25 $0.25 $0.50 $10.00

3 steps to maximize RPM
• Top level audience growth • Advertiser conversions • RPMs by section and type

Direct
ecommerce subscription virtual goods

Indirect
ads lead generation affiliate / CPA

Questions?

voodoo [at] gmail.com http://andrewchenblog.com
@andrew_chen


								
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