Rob

Could you give an example of a site you would consider at an ad based site?

ta

When I was sales director of an internet sales house we had people coming to us all the time trying to get us to say how much they would generate in ad sales so they could 'mug' a VC.  However it was a few years ago and we are all a bit wiser now.

Ad revenue is pretty much linked to traffic - so below a certain level of traffic sites just aren't going to be creating enough click thru's (for cpc) or enough volume for CPM's.

Sell through rates are important - what % of ads will be sold (forget 100% - all the main ISP's are always runnign filler ads).  A site can only really command decent CPM's if demand excedes supply with regards to banners.  The cpc model is different as its the advertisers themselves who dictate the pricing.  However as most sites will only get a small cut from Google etc for every ad thats clicked on again the volume question comes in.

Repeat sales will only come from clients/agencies if the response rates are good so this should be factored in.  Getting the first ad campaign is one thing but retaining it is another.

The ability to take a wide range of formats and rich media technologies will also affect the revenue potential from bigger advertisers.

A good ad serving system which will optimise your ad revenue is important so the systems a web site have will have an impact on revenue potential.

Selling your own ads is one route but comes with quite high costs (staff/systems) or you can outsource to a network such as Adlink who will sell on your behalf.  Some sites keep premium inventory they sell themselves and then farm out the rest.

Sorry off to a meeting now but hope that helps.  Also apologies for typo's.

Hi Rob

Advertiser businesses are only worth as much as a multiple of their profit.

Quite what multiple is down to your vertical sector, the competitive environment, the potential scalability of audience/revenue and the barriers to entry.

Geoff Inns

On 18:06:38 24 October 2006 RobMillar wrote:

Hi,

Are there any online advertising experts that understand the dynamics of ad based websites? I need to get some help in understanding valuations for these companies. If you have this kind of expertise, i'd be keen to speak. My email address is .

Thanks.

Morning Rob,

I think the key to producing revenue from a website is in fact to have a website worth visiting to begin with!

There are companies who make alot of money from affiliate advertising, they build sites aimed at informing the public and giving them choices, these sites have good content and as such should make some money.

Before you can even consider making money from your site you need to make sure that your site has good content, make it relevant to people and ensure your advertising is also relevant to your content. i.e. do not advertise tennis balls if your websites content is focused on stock car racing.

Additionally you will need people to be aware of your site, this would need to be done through PCP advertising or through clever use of SEO.

Jot me an email if you would like anymore information

Cheers

Karl Moyse

On 18:06:38 24 October 2006 RobMillar wrote:

Hi,

Are there any online advertising experts that understand the dynamics of ad based websites? I need to get some help in understanding valuations for these companies. If you have this kind of expertise, i'd be keen to speak. My email address is .

Thanks.