The Math Isn't Making Sense - Where am I wrong?

[sirmeep]

Synopsis - Producing content, marketing it via Social Media (Facebook) and monetizing via ads doesn't seem like a viable business. I have been experimenting with content creation + facebook the last month or so, and from what I am seeing, the math doesn't really work out.

My modeling assumptions

• Average CPM = $10
• Cost per FB Page Like = $.02
• Post Reach % = 4%
• Post CTR % = 2%

For every 100K Page Likes, a single post will generate 80 Clicks. (100K * 4% * 2%), which comes to around $1 in ad revenue. If we assume at least $10 to create a single article, that means you need at least 1M Page likes before you even get to break even.

I understand that you can pay to promote your content via FB, so the Post Reach will increase accordingly, and you might be able to get a higher CTR and CPM. But with all that said, you need to make a pretty big capital investment in terms of getting FB Page likes before you see any type of profit (500K Likes = $10K).

Also, this is purely for a content focused company. Meaning no monetization via affiliate. There are companies that seem to be making content production and advertisements profitable, without resorting to affiliate deals.

So... I guess my question is: What am I missing? Is there a way to make this work that I am not seeing?

 

[Kuldheep89]

thats why you need to creates viral contents.... with viral contents your followers shares it for free.... and when followers' friends see and likes it they share too.... endless free sharing = more traffic = more revenues which we not seeing in the formula.

 

[l0goz]

Think about how youtube works. Makes no difference. FB doesnt determine how much money you are going to get paid. If advertisers were to pay $40-$50 CPMs then that would be different. There are no companies willing to pay that much unless it was profitable. That is what happens when you work with a middle man = Any platform that shares ad rev

 

[sirmeep]

thats why you need to creates viral contents.... with viral contents your followers shares it for free.... and when followers' friends see and likes it they share too.... endless free sharing = more traffic = more revenues which we not seeing in the formula.

But per unit cost for creating a piece of content that will could potentially go viral is significantly higher. And, I'm guessing the probability of what does go viral is pretty low. I'm not saying your strategy isn't viable, rather there is a randomness to profiting off viral content it that is hard to predict.