how do you put a value on the user of a site such as facebook? or even more so on plentyoffish.com? I'm number crunching a marketing strategy for a startup and wondering where i could find information on the return per user for big name sites? or is this confidential?
You're basically asking "What's the net present value of the user?".
Let's say that the average user clicks 1 ad per day, and you get 5 cents per click, then each user is worth 5 cents per day. 5 cents * 365 = $18.25 in revenue per customer per year.
What's your cost? If you're paying $300k / year in salaries, Red Bull, website hosting and office rent to support a website that can handle 20,000 customers, then the cost per customer per year is $15.00.
...so your profit is $3.25 per customer per year.
What's the churn rate? If an average user lasts 2 years, then you're getting $6.50 in total profit per customer.
...except the profit for year two should be "discounted" by some factor (inflation, opportunity cost, risk, etc.). Call the first year $3.25 and the second year $2.50, perhaps.
So: a new customer is worth $5.75.
You can see all of the variables I used above - feel free to substitute your own numbers in.
Let's say that the average user clicks 1 ad per day, and you get 5 cents per click, then each user is worth 5 cents per day. 5 cents * 365 = $18.25 in revenue per customer per year.
What's your cost? If you're paying $300k / year in salaries, Red Bull, website hosting and office rent to support a website that can handle 20,000 customers, then the cost per customer per year is $15.00.
...so your profit is $3.25 per customer per year.
What's the churn rate? If an average user lasts 2 years, then you're getting $6.50 in total profit per customer.
...except the profit for year two should be "discounted" by some factor (inflation, opportunity cost, risk, etc.). Call the first year $3.25 and the second year $2.50, perhaps.
So: a new customer is worth $5.75.
You can see all of the variables I used above - feel free to substitute your own numbers in.