The Naked Truth 2009 Revenue Metrics

The Naked Truth 2009
The Naked Truth: an annual Redfin-hosted summer event to offer entrepreneurs pragmatic advice
This year’s theme: Show Me the Money
Revenue models for consumer Internet startups
July 9, 2009, Olympic Sculpture Park
500 registered attendees
Four entrepreneurs presented #s on monetizing 100K visitors
Glenn Kelman, Redfin
Ethan Lowry, UrbanSpoon
Jonathan Sposato, Picnik
Brad Jefferson, Animoto
Four experts discussed industry-wide trends
Michael Arrington, TechCrunch
Damon Darlin, New York Times
Fred Wilson, Union Square Ventures & A VC
Fred Vogelstein, Wired
Three sponsors
Madrona Venture Group
Fenwick & West
Square 1 Bank
Join the discussion
Seattle 2.0 streamed the event: http://blog.redfin.com/2009/07/nakedtruthvideo.html
Twitter: #nakedtruth

100,000 unique visitors
40,000 from Google (0 paid)
1,380 new registrants
60 new qualified clients, 24 partner referrals
82 unqualified (can’t get a loan) clients
124 days to revenue, 4.8 service requests per client
8 booked deals, 1.5 booked referrals
$61,825 / 100,000 unique visitors
96.5% direct: $7,520 per client, 20% gross margin
3.5% referral: $1,110 per client, 50% gross margin
Lessons learned
Reviews: increased conversion 36%
Simple calls to action: increased conversion 16%
First response: the golden-hour

Visitors
web: 74% Google
mobile: 99% iPhone
Revenue per 100k visitors
web: $2k
mobile: $5k
Revenue sources
Affiliate networks ($0 CPM)
Ad networks ($1 - $3 CPM)
Brand advertising ($5 - $15 CPM)
Citysearch ads (much more)
Lessons learned
iPhone and direct visitors view >2x more pages
Heavy SEO focus: 3%-5% monthly growth
Apple commercial: 300% growth

Revenue Sources
80% Picnik Premium Subscriptions
20% advertising
100,000 unique visitors (unpaid)
44.3K Direct Traffic
30.3K Search Engines
16.8K Referring Sites
16.2K (or 20.8K *) new registrants
Premium $’s earned per 100,000 uniques
$2,000 / 100,000 unique visitors
$9,145 / 100,000 new unique visitors
Premium buyers predominantly 19+ yrs old.
50.18% buy on 1st visit, 75% buy within 4 visits
0 – 14 “days to revenue”
Renewal rate = ~64%
~40% gross margin
What saves our hide: fixed costs low. marginal costs low for new features.
What else saves our hide: ad revenues
Lessons learned
Partnerships are not nirvana
We’re retail: new features and constant product freshness seem key to revenue generation
Point of purchase execution has huge impact on sales
ROI on features counter-intuitive.
Must manage backend costs; can have bigger impact on margins than top-line sales.
Press and reviews helpful, but viral WOM true drivers
We’re still at rock bottom. Lots of headroom to optimize site’s points of purchase further…

100,000 unique visitors (all unpaid)
60K direct, 10K Google organic
5K from Facebook, YouTube, Twitter & Stumbleupon
Conversion metrics
Approx. 7% of Animoto.com uniques register
Approx. 10% of registered users purchase
700 paying users per 100,000 uniques
Lessons learned
Offer something that you yourself would buy
Hybrid business model is working: ‘Freemium’ + Virtual Goods
Start w/ CPA campaigns (Referral & Affiliate Programs)
Understand & optimize conversion funnel prior to CPC/CPM ad spending

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The Naked Truth 2009 Revenue Metrics

by glenn.kelman on Jul 09, 2009

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The Naked Truth 2009 Revenue Metrics — Presentation Transcript