Midterm #1
Do we use the info give in 1b to determine the profitability of sportspassion for 1a? Or do we answer the business model question w/o using that info?
Midterm #1
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» Midterm #1
Better to answer the business model question in 1a) without using the info in 1b). The info I provided in 1b) is made up. Your answer to 1a) should be your best estimate of what their real business model is.
Also for (CPM) do this mean Charge per month $5. So if I had one 1,000 page impression for a year, it would cost me $60 a year.
CPM means cost per thousand impressions only. Every time someone visits a page it counts as one "page impression". The "M" in CPM means "mille" i.e. "thousand", NOT month. Cost per Mille is not per anything else but impressions. You pay for impressions, irrespective of whether they happen in a day or a month or a year.
so once the $5 is paid there is no other charge for that 1,000 impression
Correct.
Here's how it works. I advertise on a site, and the site charges me a CPM of $5. At the end of January the site tells me that the pages my ad was on received 50,000 page impressions in January, and sends me a bill for $250 (50 thousand impressions x $5 per thousand impressions = $250).
(account deleted)For the first question, section b, number 2, how long does SportsPassion have to break even? If the website has one member visit once a week, for example a month, that'd be four visits, but if it were for a year it'd be more.
"Suppose the average sports team has 10 members and 20 followers. Every team member visits the site once a week. Every follower visits the site once a month. How many teams would need to sign up to SportsPassion for the business to break even?"
?? Suspect you need to think more clearly about the problem. Maybe you are confusing the $200,000 annual operating cost with a one-off setup cost. The $200,000 annual operating cost is a cost they have to cover every year.
Of course it is true that over a longer time period there are more visits to the site. But the cost of running the operation are $200,000 per year. So to break even the site needs advertising revenue of $200,000 per year.
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