Tuesday, November 29, 2005


Website Buyouts Put Price of Average Website User at $38

I was just reading an interesting article over at Business 2.0 (that I was informed about by Darren Rowse's Problogger.net) that talks about how, after taking the selling price of many popular websites and dividing that price by the site's number of unique monthly visitors, they arrived at an average price per user of $38.


Why is a unique visitor worth so much? Because mainstream business is finally beginning to tap into the potential of online advertising. In 1995, there were hardly any US online ad sales to speak of, by 1999, that figure had reached $6 Billion. At that point in time, most dot-commers were projecting online ad sales to be somewhere in the ballpark of $16.5 Billion by this year. Then the bubble burst, in 2002, online ad sales had gone back down to $6 Billion (from $8.2 Billion in 2001). In spite of the burst four years ago, online ad sales are projected to reach $12 Billion this year.

The average American consumer spends 3 hours a day online as opposed to 1.7 hours watching television. However, American industry spent over $25 Billion in the first six months of 2005 on TV advertising alone. If viewing time is any factor, it's easy to see how spending on online advertising could stand to be four to eight times what it is now!

So what can I do about it?

Why not start an online community? Successful communities have thousands of members, many of whom visit the community quite frequently. Some visit daily, some visit weekly, some visit several times a day.

According to the Business 2.0 article, companies pay more per user if your users are "fiercely loyal." Imagine how many companies would be willing to pay for advertising on a website with thousands of loyal daily visitors?

But I'm not Confident Enough to Start My Own Community

That's where Zoints comes in. Stay tuned...

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