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For most web startups, MR is not fixed, and it does increase with the number of users. This is mostly due to the price of advertising not being fixed. The value
by jfornear 18y ago
For most web startups, MR is not fixed, and it does increase with the number of users. This is mostly due to the price of advertising not being fixed. The value to advertisers increases for every additional user.
- deleted 18y ago[deleted]
- zepolen 18y agoThe increased value for advertisers only holds true if the advertisers are paying a fixed rate per month regardless of impressions/clicks. As for marginal revenue of the startup: - Fixed rate = MR falls with increasing users. - CPM = MR falls as the more the pageviews you get, the better a price advertisers will demand from you. - Per click = MR remains relatively stationary but as with CPM, at some point demand and supply kicks in and when you supply more clicks than advertisers want (for a certain price), they will pay less /per click/. To get increasing MR in advertising would require changing the rate of 'more likely to buy' users relative to users in general. On the internet it's the other way around, more users == less likely to buy, and with things like Adblock becoming more and more mainstream, it hinders it even more.