(2013-04-30) Cohen Sustainable Cpc Vs Subscription Rate

Jason Cohen takes some typical Bench Mark Sales Funnel metrics to calculate the Sustainable CPC WebAd rate you can afford to pay, given your monthly Subscription Rate (BootStrap Revenue Model). CPC = MRR/25. So if you're charging $50/mo, you can afford to pay $2/click.

I Commented

• that the corollary is that B2C apps can't use advertising to grow, since $5/mo allows for only $0.20CPC of which there ain't none, and
• you could go the other way and say: "if your niche has a price of $x/click, you need to charge $25x/mo for your service". So if you have to pay $5/click for traffic, you need to charge $125/mo!

(Of course, if you can do significantly better than his benchmark assumptions, then you can afford to pay more (or charge less).)

Jason also pointed out: if you're not spending $5k/mo you're probably not getting that much data, in fact. False-positives will overwhlem real results.