I was thinking about this during a drive about many sites and services that just don’t have a natural or artificial viral component. Some great sites come to mind:
link to photo
Your Marketing person is thinking: “Shit, I wrote that I do viral marketing on my resume and our site is not viral so what do I do now.”
Arbitrage. Huh? Is that French? No, but it’s a decent way of growing your site. If you know your value per user over some period of time you can just buy traffic for less than that. Example:
monthly active users = 10,000
monthly revenue = $15,000
value per user = $1.5
Now let’s have some fun arbitrage math:
cost per click = $.25 (you can buy from Google, Facebook, where ever)
% click conversion to user = 25%
cost per user = $1 (it takes 4 clicks times 25% conversion to get 1 user at $.25 / click)
At this point for every user you buy you are making $0.50 ($1.5-1). You should buy as much traffic as you can! Bottom line: If the cost to acquire user is < value per user over fixed period of time you should be doing this.
* this math does not include a lot of factors like decay (how long the user stays) and more…
There are many other growth solutions including the dirty word, “seo” which I may write about in the future, word of mouth campaigns, generic advertising buys and more…
We have done arbitrage with some our apps and it works out well at different points in time. Has anybody else had luck with it?
Want More? Get new articles via email: