To Those Who Make Money With Their Forums - What's the Tipping Point?

[Divinum Fiat]

Brogan, feel free to move this post if this is in the wrong place (sorry if it is).

I've read in another (very enlightening) post that many are managing their forums as a labor of love and almost no one in that post is making $$ with their site. Gulp.

So my question is for those who DO make money with your site (please help enlighten us newbies):

• After how many users can a site be turned into an income site?
• Do you have any preferences where the income is coming from (ads, memberships, product sales, etc.)?

Thanks everyone!

 

[dutchbb]

It depends on the topic of the site. I remember we got it profitable at around 20-30 users online at the same time during the day. But it could be different for you.

You should diversify income, but ads are probably the easiest way to start.

 

[digitalpoint]

Ads are usually the easiest, but not necessarily the most lucrative. I think we were somewhere around 1M posts before we even bothered placing an ad of any sort.

If you want to make enough to live on, you need a fairly large forum. A better idea is usually when your forum isn't your primary revenue source, but rather a support venue for something else you are doing/making money from. Just like any site, just ask yourself what value are you bringing to end users, and if you were an end user, would YOU be willing to pay for whatever that is?

 

[petertdavis]

If your revenue is primarily ad-based, as most forums are, your tipping point is going to be your raw traffic not active users, or anything like that. Beyond that there are too many moving targets to pinpoint the exact number where you can say that you "make money with your site."

 

[wrx1]

Step 1, define 'making money'.

For me, a local car community, we make enough money from adsense to keep the site alive and running and hold a couple of site sponsored events a year. Alone with donations, we created some swag for the members that they purchase. Overall, we keep the site up and running, we can make any kinda of merch we want, hold the events we want, and can continue to do business. At no point in time will the site ever have the traffic or generate the revenue for me to quit my job and run the site full time, but the site does generate the cash to keep running plus some extra for the things we want to do.

So for me, my site makes money. We always have 20-40 members online and 120-170 users online, 10-12k pageviews a day. That alone will keep us up and running on 2, 512mb linode vps slices (about $40 a month).

 

[petertdavis]

If your revenue is primarily ad-based, as most forums are, your tipping point is going to be your raw traffic not active users, or anything like that. Beyond that there are too many moving targets to pinpoint the exact number where you can say that you "make money with your site."

BTW, just to follow up on my point. There's an easy formula you can use to figure out where you need to be. You'd just need two of the three numbers to figure out the goal.

Earnings = Ad Impressions x CPM

So, if you know what level of earnings you want to reach, you need to know either/or how many ad impressions you can sell and the CPM rate you can get for selling them. The hardest part is the CPM, as you usually won't find any source to sell all of your ad impressions for a flat rate. But, this should give you the general idea, and maybe help you set some goals.

 

[digitalpoint]

Also CPM can vary massively based on your niche (like does your user base respond to ads and are they willing to buy whatever products/services the advertiser is offering... remember, advertising isn't just free money, normally it's a business trying to spend advertising money in order to MAKE more than what they are spending). CPM also generally goes up the more popular your site is... specifically when your site is popular enough that advertisers want to advertise specifically ON your site.

An example of how wildly CPM can vary is we sell our banner ads on a bidding basis... $1/CPM is the minimum bid (and some people get their ads run for around $1.25). But we also allow people to target specific areas of our site... and advertising within the "Web Hosting" or "Affiliate Programs" forum on our site tends to have much higher bids needed for the ad to display (sometimes as high as $75/CPM even though the minimum bid is still $1).

So yeah... totally depends on the niche, how many people are competing to advertise specifically ON your site.

 

[Divinum Fiat]

Thanks everyone for your great feedback!

So what if my goal is to stay ad-free? Why would I want to get a buck just so my visitor can leave my site and go elsewhere? It doesn't make much sense...

No one making $$ from memberships or their own products?

 

[craigiri]

Our site was profitable the first month - when we went online in 1995 and has been so since.
Making money, in my case, is defined as making more than I spend - NOT including my time. This was because, honestly, I would have done it for little or no money as a labor of love (a subject you seem well versed in).


IMHO, most content sites have only a few methods to make money, and they are somewhat similar. I don't think the subscription model will work for a relatively low traffic site (that is, getting your members to pay!).

A. Google Ads - Adsense. I won't expand on this, since it is common knowledge.
B. Directly sold ads - this means you see ad rotations to specific clients, usually with a business which is aligned. This can be difficult if your forum is not fairly large and offering heads and shoulders over others....
C. Site Sponsorships - this is somewhat like B, except instead of ads being sold on an impression basis, you set up a scheme such as "Gold Sponsors" where they get a number of banners and listings and other benefits year-round.

I make very decent income from all three of the above efforts. B and C will pay me more per impression, but A can always fill in the excess inventory and also let you truly know what your forum is worth.

As a quick guide, if you use adsense and find that you are able to make $20 a day, it is possible that directly selling those same ads (and offering a decent value proposition) could earn you $40 to $50. S

In your case, adsense is the way to do to test the waters...to see if you have enough traffic and value to generate income. You can learn a lot from that and then move on. Of course, when I started there was no adsense....nor anything like it! I had to hustle and bit, but would have been happy with just a small stream of income since this was a sideline for me.

 

[digitalpoint]

Thanks everyone for your great feedback!

So what if my goal is to stay ad-free? Why would I want to get a buck just so my visitor can leave my site and go elsewhere? It doesn't make much sense...

No one making $$ from memberships or their own products?

That was exactly my reasoning... What's the point of making a few bucks on advertising that annoys people? Which is why we waited a LONG time before we were well established before we ran our first ad (as I mentioned earlier in the thread, I believe it was somewhere around us having 1,000,000 posts).

And yes... we have memberships and products that we make far more than we do from advertising even now. But this of course is dependent on you having a product/service that people want, and that's usually the tough part (selling premium membership so people can change their user title for example isn't going to be wildly popular). Our premium membership isn't cheap ($25/month or $125/year if they pay for the full year), but we have a LOT of subscribers because we give them tons of things that they would be willing to pay for even if they weren't a user on our site.

The best thing to do is sit back and pretend you didn't even have a forum... what things can you offer/sell to people that they would be willing to buy? Just consider XenForo a platform for selling services and you will be much better success than trying to sell things related to your forum directly. Most of our premium membership subscriber don't have a single post on our forum (nor do they have any interest in it).

 

[craigiri]

Thanks everyone for your great feedback!

So what if my goal is to stay ad-free? Why would I want to get a buck just so my visitor can leave my site and go elsewhere? It doesn't make much sense...

No one making $$ from memberships or their own products?

I tried products through Amazon (their related products listings) and never made a cent. But if, for instance, I was a mac site....I might do well with stuff like that.
If the products are relatively low or medium priced, you will have a steep road to climb!

Some examples of the little guy(s) begging for money and selling products (though others, usually) are:
http://www.kenrockwell.com/tech.htm
http://macintouch.com/

As far as the visitor going elsewhere - you should start with the assumption that they do that anyway. Adsense will rarely take even 1% of your visitors elsewhere......

 

[Divinum Fiat]

(as I mentioned earlier in the thread, I believe it was somewhere around us having 1,000,000 posts).

1 million posts? Gulp... I'm barely over 3,000. Hasn't anyone ever told you that patience is not usually a virtue of any woman? Just kidding (well, not really). Still, not sure I'm still alive by the time my forum hits 1 million posts. Need a different strategy.

Most of our premium membership subscriber don't have a single post on our forum (nor do they have any interest in it).

Now I'm confused. If your premium members are not there for the forum part, how do they first hear about your premium membership and what's "in there" that they are willing to pay for but without participating in the forum? I thought getting forum members into the premium membership is using the "funnel" technique but I guess there is a directer way of baking the cookie?

 

[digitalpoint]

1 million posts? Gulp... I'm barely over 3,000. Hasn't anyone ever told you that patience is not usually a virtue of any woman? Just kidding (well, not really). Still, not sure I'm still alive by the time my forum hits 1 million posts. Need a different strategy.

Well that was just us... that's not to say you can't make money before having 1M posts. I'm just saying that there *is* an indirect cost associated with running ads on a newly established site (more or less you make money when people LEAVE your site).

You could make a lot of money with 50 posts if you had a massive amount of people reading those 50 posts... Ad revenue is largely based on traffic. If you can't sustain the traffic, no one is seeing the ads and in turn advertisers aren't making money with their advertising investment.

These days, we sell most of our ad space directly to the advertisers via our DP Ads system... but we still use AdSense as filler. Our AdSense stats from the last year show we have been averaging $2.10 RPM (revenue per thousand impressions). Obviously there are a lot of factors that go into that number, but for sake of simplicity, let's just say that was a static value... If you are fairly new/small maybe you get 1,000 page views in a day on average... which would work out to $2.10/day if you ran one ad per page. So like $60 or so a month... not really something you are going to retire on. And then you have to factor in that people are leaving your site when they click an ad.

Now I'm confused. If your premium members are not there for the forum part, how do they first hear about your premium membership and what's "in there" that they are willing to pay for but without participating in the forum? I thought getting forum members into the premium membership is using the "funnel" technique but I guess there is a directer way of baking the cookie?

90% of our premium members come from products/services we have that are in no way related to our forum.

Around 950 of the 1,000 largest vBulletin 4 sites use the search system we built (originally just built it for our own site only): http://products.digitalpoint.com/vbulletin-sphinx-search.php

We have over 100,000 registered users that use our search engine position tracker: http://tools.digitalpoint.com/tracker (obviously not all of them are premium members). This tool was one of the reasons we had to start a forum (we needed a support venue for the users we already have)

Our Phone Home system has a ton of people subscribing to premium membership to use the advanced features of it: http://tools.digitalpoint.com/phonehome

So yeah... we *do* have a large forum, but our site is not based around our forum. Our forum is based around the rest of the site... and most of the people buying our premium membership is because they want a product/service we have... not because they give 2-cents about the forum itself.

 

[craigiri]

It should be mentioned that the income a forum can bring is often related to the product or service it offers.....

That is, if your forum was about leasing Private Jets, you'd probably make some $$ with 3,000 posts, but if very generic ads show up, you will make 1/100th as much or less.

Love?, Well, I guess it is priceless, but the advertisers don't look at it that way...

 

[DRE]

Brogan, feel free to move this post if this is in the wrong place (sorry if it is).

I've read in another (very enlightening) post that many are managing their forums as a labor of love and almost no one in that post is making $$ with their site. Gulp.

So my question is for those who DO make money with your site (please help enlighten us newbies):

• After how many users can a site be turned into an income site?
• Do you have any preferences where the income is coming from (ads, memberships, product sales, etc.)?

Thanks everyone!

In 2011 I made $1045 in adsense and paid subscriptions, spent $960 to run the site plus commercial add-ons. Profit was only $85. If your curious, I've updated the first post of my site's thread with a breakdown of how much it cost to run it in 2011 along with the xenforo add-on I paid for, my hosting and licenses breakdown too.

 

[digitalpoint]

I forgot to mention... since your site is about dating/love, etc... Probably your best bet to make some money is via affiliate programs related to your niche. I have some experience with dating affiliate programs, and just FYI - eHarmony converts exponentially higher than other programs (at least when I was doing it). Probably because people who are interested in eHarmony are people who are looking for a life partner, not a date or a good time... so they are willing to shell out the cash (they actually pay you more than half of the membership fees they get from the people you send).

Tossing a single eHarmony affiliate ad on your site would probably make you 50x more than AdSense.

If you can send a good amount of traffic that ultimately converts into paying customers for them, you can make a TON (I peaked at a six figure check from eHarmony in a single month when I was doing it). But again, I was sending lots of very targeted users who were converting into paying customers for them.

 

[Andy.N]

It's all about having a very target audience and be the #1 site in that vertical.

 

[wrx1]

1 million posts? Gulp... I'm barely over 3,000.

Well that was just us... that's not to say you can't make money before having 1M posts. I'm just saying that there *is* an indirect cost associated with running ads on a newly established site (more or less you make money when people LEAVE your site).

You could make a lot of money with 50 posts if you had a massive amount of people reading those 50 posts... Ad revenue is largely based on traffic. If you can't sustain the traffic, no one is seeing the ads and in turn advertisers aren't making money with their advertising investment.

These days, we sell most of our ad space directly to the advertisers via our DP Ads system... but we still use AdSense as filler. Our AdSense stats from the last year show we have been averaging $2.10 RPM (revenue per thousand impressions). Obviously there are a lot of factors that go into that number, but for sake of simplicity, let's just say that was a static value... If you are fairly new/small maybe you get 1,000 page views in a day on average... which would work out to $2.10/day if you ran one ad per page. So like $60 or so a month... not really something you are going to retire on. And then you have to factor in that people are leaving your site when they click an ad.

Now this is how things will be different from site to site.

You take DP's site. He stated that he is averaging $2.10 RPM. I would LOVE to be pulling a number like that. I looked at my adsense for the past year (Aug 1 was the switch to XF), and we averaged $0.65 RPM. Some months were .35 and some months were 1.00, but at the end of the day, we were only getting .65. Now my site is local to me, it is a group of like minded car people (all subaru's all day) and thats it. DP's site has much more traffic, a much wider interest, and in turn, a much higher competition for ad space. We are talking $1.50 RPM from site to site.

Now I just looked at your site and you only had 13 people online (all guests). That's not a lot of traffic to generate a good adsense income. You have also stated that you are not real interested in banner ads, which at this time is probably a good idea. Just concentrate on content and the traffic will follow. First priority is to make the site self sufficient. Generate enough income to cover all you website costs (hosting, domain, Xf support, etc). You might be able to get away with just a simple donations option for the time being. From there you can figure out what your fanbase is looking for.

Russ

 

[Divinum Fiat]

Tossing a single eHarmony affiliate ad on your site would probably make you 50x more than AdSense..

I hadn't even thought of doing affiliate marketing for dating sites! What a 'duh' moment. Maybe because I'm not fond of them... I'm not a dating forum as much as a site for spiritual love (sacredness over the raunchy relationship stuff most people deal with). But there are definitely pages that would be totally appropriate for eHarmony and such. Now I need to figure out how to put individual ads on individual pages.

Cool ideas! Thanks everyone.

 

[DRE]

Andy's right. You have to target your target audience. I haven't targeted my target audience yet because my Media Law Wiki isn't ready yet. My site is still in a development phase. Once my Wiki is available to the public and my tutorials completed, then I will pour money into advertising it, word-of-mouth etc. After the first year or two of doing that traffic will increase and if it doesn't then I'll call it a day. You basically have to plan for the long term if you want to make money.