Let’s say you wanted to create a website that would generate enough annual revenue to allow you to live comfortably. For the sake of round numbers, let’s say that magic number was $100,000.
With that as a target, I wondered how CPMs and pageviews interact to meet that goal. Obviously with higher pageviews, a lower average CPM would be necessary, and with lower pageviews, a higher CPM would be necessary. But how high and how low?
Much like the the miles-per-gallon conundrum, the results were surprising. Two things stood out for me. Given a constant revenue target, the process of increasing average CPMs starts to produce diminishing returns above $10. As a rule of thumb, in order to “live” off your website given “normal” CPMs ($4-8), it needs to be generating one million pageviews per month, minimum.
Of course all this is supposing you’re only monetizing your traffic with a single ad unit. Most sites place at least a 728×90 Leaderboard at the top of the page, a 160×600 Skyscraper down the right side, and a 300×250 Medium Rectangle within or between articles. What this accomplishes is a doubling or tripling of the average CPM for a given pageview, which can help reduce the number of monthly pageviews required to reach that $100,000 target. If your average CPM per ad unit was $6, and you had 3 units placed, you could reach that target with only 460,000 monthly pageviews.
For comparison, Justinsomnia currently gets about 65,000 pageviews per month. I serve Google AdSense ads on pages that people arrive at coming from outside my site, which amounts to about 50,000 pageviews. Of that my eCPM is about $2, netting me around $100 a month.
What can I say, I work in online advertising…