Is this a realistic estimation?

[yeikow]

Hi,

I am in the exciting mindstorming phase of a new project and would like to get your view on the rough numbers I put together.

These are subjective projections and may be way off the mark, hence why I put this post. Please forget about how I will get there for the time being and focus on the accuracy of the revenue if do hit that traffic.

The site will provide daily ORIGINAL video content and will endorse products visitors can normally purchase through Amazon. I have so much passion behind this, it adresses my mind heart and soul, but I still have to find out if I could eventually make a living out of it.

Your objective input is very appreciated!

(Numbers calculated for 1000 unique visitors a day)

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BANNERS:

$1CPM (is this way too high?)

1000 visitors; 2 pageviews per visitor -> 2000 impressions = $2/day-> $60/month

4 125x125 ads => $240/month
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ADSENSE

1000 visitors => $1.25/day => $37.50/month

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AMAZON

$1/sale
Conversion Rate 1% -> 10 sales/day = $10 => $300/month.

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AFFILIATE PROGRAM specific niche related offer pays $20/sale

Conversion Rate 0.20% -> 2 sales/day = $40 => $1200/month

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TOTAL ESTIMATES:

For 1000 vistors/day => $1,777 /month
For 10,000 visitors/day => $17,775/month
(can one make the 10x direct deduction I just made considering quality of traffic remains constant?)

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Thanks a lot for your experienced feedback!

[Addict]

I'm no expert, but are you suggesting a 1% amazon conversion rate PER DAY?

That would suggest that, unless you're assuming constant visitor turnover, that in a year, one in every three visitors would have bought a product. Maybe that's accurate, but it seems high to me.

your CPM seems to be average, there I've heard there are no typical cpms

[Brutha]

(can one make the 10x direct deduction I just made considering quality of traffic remains constant?)

No. For Steve for example revenue was growing faster than traffic.

You can't really predict how much money that website will make. Different designs of the website might more than halve or double the amount of money you make.

[yeikow]

Thanks both for your quick replies:

@Addict: 1% I estimated because each video chapter after providing content will endorse a product that can be purchased through Amazon. Therefore I expected the Conversion Rate to be higher than a regular blog, though someone running Amazon Associate program may be able to tell whether this is misguided?

@Brutha: You can't predict accurately. But you must do your best. Otherwise it's like going into business without a business model.

More thoughts anyone?

[Brutha]

Otherwise it's like going into business without a business model.

That's why a service like twitter has the success that it has.

Experimentation is various different ways of doing things and making your decision based on reality instead of based on theoretical predictions that are way off is more likely to produce success.

@Addict: 1% I estimated because each video chapter after providing content will endorse a product that can be purchased through Amazon. Therefore I expected the Conversion Rate to be higher than a regular blog, though someone running Amazon Associate program may be able to tell whether this is misguided?

I would also guess that 1% is way to much.

[runningbird]

Theoretical predictions are based on reality. That's what makes it a "theoretical prediction" and not a personal fantasy. What specifically do you suggest yeikow change in his approach to analyzing his finances?

In my opinion, twitter is successful because it caters to a society insanely bent on self distraction.

[Brutha]

Theoretical predictions are based on reality. That's what makes it a "theoretical prediction" and not a personal fantasy.

There are theoretical predictions that are based on reality in some field.

In others you just can't predict accurately.

If you predict you are less likely to be open to things that go against your predictions.
Maybe Google AdSence will make most of the revenue for the website, maybe Amazon sales or maybe affiliate programs.

In my opinion, twitter is successful because it caters to a society insanely bent on self distraction.

A lot of things cater to a society insanely bent on self distraction and don't produce a multi million dollar company.

To build things that are successful in the internet you generally have to innovate and that means that there is no basis for making accurate predictions before you started.
Especially no predictions with have 5 known digits.

Most ideas fail and some succeed but you don't know beforehand with ones will succeed.

Additionally thinking that 10*$1,777=$17,775 is just bogus math and it shows lack of understanding of the numbers and the math involved.
If you start with numbers with two digits accuracy like 1200 there no way you can later get more than two digits accuracy in your result.

[runningbird]

That rule of significant figures is true for sharing measurements, but for this case there is no reason to mind the rule. The reason you pay attention to significant figures is that it can mislead others into thinking you have highly precise measurements when you don't. In this case, in trying to arrive at an accurate prediction, truncating digits reflects the precision, but diminishes the accuracy ever so slightly. There is no real reason to be too adamant about either way for this purpose.

[Brutha]

The reason you pay attention to significant figures is that it can mislead others into thinking you have highly precise measurements when you don't.

Or you can mislead yourself.

There is no real reason to be too adamant about either way for this purpose.

Knowing whether the number that you have is just noise or contains information is important if you want to do anything other with your number than having the number for psychological purposes.