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Tim O'Reilly's Economics of Online Advertising
Tim O'Reilly recently posted an article about the Economics of Online Advertising. Immediately, he cites a Mark Jacobsen article which discusses Three ways to build an online media business to $50m in revenue. Do you really need that much?
Here is the math:
* At the $1 RPM (CPM/CPA/CPC) level achieved by most general sites, you need 4 billion page views/month.
* At the $5 RPM level achieved by demographically targeted sites, you need 800 million/month.
* At the $20 RPM level achieved by highly targeted sites, you need 200 million/month.
Most sites can hope to roll in within the $1 through $5 range. So these are scary figures to get to $50m. (Although, revenue isn't that important. I could get $50m revenue easily enough by selling dollars for 99 cents).
