The Average Revenue per (active) User we’ve achieved is $0.05 per month. I actually think there’s quite a lot of room to increase this number too, through offering more variety of adverts and getting at least some advertising sold on a CPM basis rather than all PPC.
Anyway, this gives us an ARPU (active users) of approximately $0.60 per year, although the ARPU will be a bit lower as of course some of our members will become inactive over time. In fact, I think our churn may be as high as 50% per year.
So the question is: what price can we pay to acquire users through our affiliate program? Well I’m pretty happy to offer an average of $0.20 (we may pay slightly more for couples/women and less for men to try to balance out the sexes). I think that at this rate we’ll pretty much break even on a simple ARPU basis and also assuming a 25% conversion rate then we’ll be paying a competitive $0.05 per click to webmasters (I looked at our Adult Friend Finder affiliate account and we’ve averaged $0.06 per click).
However it’s not as simple as this. Each new user has an SEO benefit and we also have a very high rate of users recommending the site to others (both informally and via our recommend a friend feature).
Finally, we also have a problem that some areas of the world really need to be seeded. In particular we just don’t have enough members in the USA to make any state viable.
So I think that an investment of say $20,000 on an affiliate programme would show a positive return within about 6 months of the spend based on the straight ARPU but would also have a deeper positive effect thru SEO and getting us into new geographies.