The Value Of A Hit

By this, I mean, what is a hit worth to you? (By hit, I mean one unique visitor or user session.) Compute this number by dividing total sales amounts (gross profits) by number of hits. That is, find total earned for say a month. This includes your part of sales of products produced by others, commissions on sales, and so forth. Your stats will provide number of unique hits.

For example, if you have a gross of $200 for month, and 1000 hits, value of a hit is 200/1000. Which is 0.20 or 20 cents. If gross was only $50, then this number is only 0.05 or 5 cents.

Moving Averages

With a mature site routinely generating hits, this number is not likely to vary markedly from month to month. Even so, a good plan is to include in your results a 3 (or 4) month moving average. For example, given Jan: $0.30, Feb: $0.20, and Mar: $0.10, add these three numbers and divide by 3. (30 + 20 + 10)/3 = 60/3 = 20.

The reason this helps is that looking only at monthly data, above looks like an ugly downtrend. The 3 month average eases that downer feeling. Equally important, it helps you keep from getting too excited about an apparent up trend.

Suppose value for April jumps to $0.40. For new average, January is excluded; you look at only last three months. This gives (20 + 10 + 40)/3 = 70/3 = 23.33 which is roughly 23 cents. In considering 23 cents as opposed to 40 cents for month, there is a more reserved view of sudden jump.

I chose numbers here to make things easier to follow. Actual results for your site will look quite different. And since computations, while simple, can be tedious and prone to error, most who take this sort of thing seriously use a spread sheet program, such as Excel.

Why These Numbers Matter

The value of a hit is fundamental to what you can afford to pay for advertising. And you'd like to stay a bit under this figure. If ad produces only this value per hit, campaign was a fizzle, for no profit was made. (The exception would be value of new customers as subscribers to your newsletter, those who return to purchase other products, and so forth.)

There's a lot of trial and error in testing ads, but ins and outs of it are off topic here. For our purpose, suppose you have a well tested ad that can be expected to generate 25 hits in 1000 impressions. If value of a hit to you is 50 cents, then you can expect a gross of 25 x $0.50 or $12.50.

What this means is you can afford to pay up to $12.50 CPM (Cost per 1000 impressions) provided hits add to your subscriber list or returns for other products. If you expect only a one time sale, you probably will not want to pay more than $6.25 CPM, so that half of revenue is immediate profit.

With an established site, even given troublesome variations month to month, it is a fairly straightforward matter to decide what you can afford to pay for advertising. Things are different, though, for ...

New Or Small Sites

Whether you are trying to find out about:

apples, business, cats, dogs, energy, food, garbage, health, insurance, jersey, knowledge, love, manuals, neon, orbits, people, queens, rubies, stars, town, ushers, valets, women, x-rays, yahoo or zoo.

EVERYONE wants same thing:

1. To find more INFORMATION on a subject.

2. To find PEOPLE with similar interests.

Basically, what you want to establish is your own personal community of information and people.

Some refer to this as your niche or target audience.

Where does your search begin?

The question gave you answer; start your research with your favorite search engine.

1. Search Engines and Directories.

Top Ten Search Engines: http://emailexchange.org/promo2.html

I use Google. http://www.google.com.

That is where I begin my research.

Then, I suggest you hit at least top 5 Search Engines And Directories.

For a list, via Auto-Responder, of "Top 10 Search Engines and Directories!"

Send a blank email message to: mailto:Top10SE@emailexchange.org

Here is List of Top 5:

1. Google: http://www.google.com.

2. Yahoo: http://www.yahoo.com

3. AltaVista: http://www.altavista.com

4. Excite: http://www.excite.com

5. AOL: http://www.aol.com

Review Top 10 results of "keywords" used in your search. Do it from each of Top 5 Search Engines above.

This will give you a solid lead to begin your quest. Because your next task is to visit those 50 web sites.

Weed out useless or dead links. Begin to form your community.

Bookmark all web sites that hold interest and promise.

When did you first discover Internet?

It is a mysterious, scary, exciting, fun, never-ending adventure that is full of daily learning experiences.

Whatever reason brought you to Internet, be it personal business, curiosity. you will soon discover that Internet is all about communication.

In fact, Internet = Global Communication.

And, foundation of that Communication, is email.

Therefore your next step is to reach out and "touch" that [ "community of people" ] you seek by sending email.

ALWAYS without resorting to SPAM.

Because it is against Internet rules and because it creates more problems that it solves. SPAM is out.