Build an Online Media Business that Earns $50 million
Filed Under Affiliate Marketing, Internet Marketing, Multivariate Testing, Online Advertising, Search Engine Marketing, Split-Testing | Comments Off
How do you build an online media business that earns $50,000,000 in revenue each year? Tim O’Reilly has a post titled The Economics of Online Advertising that points to a blog post by Jeremy Liew titled Three ways to build an online media business to $50m in revenue. It is a simple matter of 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.
For me this underscores the need to have a site that converts a large percent of its visitors. With a sloppy site that does not convert well, you need 4 billion page views per month. With a medicre site you need 800 million per month. That is a huge difference! That is a difference of 3,200,000,000 page views. Simply because the second site converts it’s traffic 5 times better than the first. Let’s take a look at the highly optimized site that converts 20 times better than the sloppy site. For this site to earn $50 million dollars in revenue per year, you only need 200 million page views per month.
Well those are the numbers but how do you get there? Testing, testing and more testing. The key to this formula is to develop a highly optimized site. Obviously you also need the traffic, but we will discuss that in another post.
In this post I am going to recommend multivariate testing. Multivariate testing is an accelerated version of A/B split testing. A/B split testing will test on page element against another. These 2 elements could be different headlines, different colors of links, or even different margins. What makes multivariate testing so amazing is that you can test multiple page elements at the same time. I have used one called Split Test Accelerator that is amazing. It will literally test 7 elements with 7 possible values on a single page. So, you are effectively able to test 49 elements all at once. It would take 25 A/B split testing iterations to do that!
 Another multivariate testing product I can recommend is from a blogger who specializes in statistical testing of just about everything related to internet marketing. His name is James Brausch. The name of his mutlivariate testing software is MuVar.
If you get a significant flow of traffic and you are not using any testing software like this, you will see dramatic results as you implement the winning combinations of factors. You could double your revenue just by increasing you conversion rates. So go get testing!
