Server Costs vs. Advertising Revenue

BishopMVP · 08-26-2010, 07:10 PM

PING: anyone with experience in the area. My experience with website design consists of about 3 geocities pages back in the day.

I've had some preliminary discussions about setting up a site to basically aggregate information on Massachusetts Lacrosse, with a focus on HS teams. I found this site for Minnesota that looked similar Minnesota Lax Hub although I definitely would not be as graphics-intensive. I talked to one of the ngin guys behind it and he implied that ad revenue was nearly offsetting the server costs. Does that sound accurate? What are the raw numbers there? Would adding a message board increase server load? He also said designing that site and template was around $3650, with some lower-end options in the $600-$800 range. Is that normal?

Router Help · 08-26-2010, 10:34 PM

Lots of generic answers but. . .

1. It certainly is possible to pay for hosting with ad revenue.
2. Adding a message board would add some load to a server but there is also more potential ad revenue there.
3. I didn't dig too deep but that site seems pretty deep. I know we'd charge much more than $3650 to do that, but you might get some independent contractor to do it for that much.

JonInMiddleGA · 08-26-2010, 11:05 PM

I'll offer a few other generic comments as well.

1. You can definitely offset server costs with ad revenue but that really comes down to a matter of traffic volume + demographic quality of traffic.

2. I'd be wary of anything implied by someone who makes their living (ngin) on selling you their site template which carries an annual fee + hefty setup costs. It wouldn't be unheard for someone in that position to be willing to imply that you'll become more popular with women & have minty fresh breath if they thought that would get you to cut them a check.

3) Just looking at that site, I would imagine you'd be looking at more than $3650 to get a similar site design/functionality done on a custom basis. If you like that site, I cannot recommend strongly enough that you really dig into it & figure out what you like/don't like, what you'd keep/remove, what you can't live without, what's optional, etc etc. Establish your parameters & then get a couple of quotes. Find the right dev when they've got more payroll bodies than work & you could end up getting it cheaper but the only way to know for sure is to dig into deeper.

edit to add:

4) Know the market for advertisers in the niche. Are there dozens of national equipment manufacturers advertising all over the internet? Are there substantial local/regional advertisers specific to lacrosse (again here, equipment type comes to mind off-hand)? Does the governing body(s) for the sport at the high school level seem to attract a lot of sponsors, which you could then convince to cross promote directly with your site? Does the sport have, and do you have access to, any "affinity sponsors" that would be thrilled to take a chance on the site because they were so happy someone was doing it? What size fanbase (and therefore eyeball potential) does high school lacrosse have in the state? How much economic stress have HS sports been under in the state lately (since many of your potential sponsors may have already been hit up hard for donations/advertising/contributions)? I don't know the answers to any of those questions -- I'm not in MA, I don't follow lacrosse, and I know nothing at all about HS lacrosse -- but I'd advise you to be able to have reasonable & researched answers to most of those questions when you assess the likelihood of the site being self-supporting.

Icy · 08-27-2010, 08:59 AM

The two answers above nailed it.

Think on internet as just any other media, like TV or magazines. The more audience, the more you can earn from advertisers, so the key is to analyze the market that you will be targeting, in your case lacrosse.

I know nothing about lacrosse or how popular is it, the competence you will have from other sites etc, so i can't talk about that.

So about the question of if you will just cover expenses or will make some money, it's all related to the audience you can get, but have on mind that hosting is so cheap right now.

Besides the minimum monthly fee, your hosting bill will grow as your traffic does, so it's not that it will get out of control as long as you don't stream video. Plain text, some graphics and a message board barely count for your hosting bills, as a sample, i pay around $1500 monthly on hosting for a network of over 100 sites with 500,000 visitors per day, in a very popular market, that is a really low cost for the return and for that amount of traffic (think that to buy a single monthly add in my network is already more expensive than that).

If you add video streaming (like youtube) then the hosting bills will raise a ton and it's way easier to lose money if you are note careful.

Also i don't think you need to start with a $4000 design for a fan/news/blog site, in fact you can use a free portal software like joomla with a free or even $50 to $200 template, a free board software like simple machines or phpbb, etc and have a nice site/blog/news site to start with and to know if you enjoy writing daily etc, that imho will be the bigger problem, as it's easy to get bored unless you are a huge fan of the thing you are writing and you really enjoy doing it even if just a couple of friends read it daily.

Sampe of a site using joomla with a $55 template, i just googled for it, but there are a docens available in different sites: Joomla Sports Magazine

For that price the template is not unique, it means other sites could be also using it, but you can pay somebody to create a nice logo and do some customization so it will look almost unique.

If the site grows enough and you enjoy doing it, then you can think about a more professional design and about your hosting bill raising as the site does.

08-26-2010, 11:05 PM	#3
JonInMiddleGA Hall Of Famer Join Date: Nov 2000 Location: Behind Enemy Lines in Athens, GA	I'll offer a few other generic comments as well. 1. You can definitely offset server costs with ad revenue but that really comes down to a matter of traffic volume + demographic quality of traffic. 2. I'd be wary of anything implied by someone who makes their living (ngin) on selling you their site template which carries an annual fee + hefty setup costs. It wouldn't be unheard for someone in that position to be willing to imply that you'll become more popular with women & have minty fresh breath if they thought that would get you to cut them a check. 3) Just looking at that site, I would imagine you'd be looking at more than $3650 to get a similar site design/functionality done on a custom basis. If you like that site, I cannot recommend strongly enough that you really dig into it & figure out what you like/don't like, what you'd keep/remove, what you can't live without, what's optional, etc etc. Establish your parameters & then get a couple of quotes. Find the right dev when they've got more payroll bodies than work & you could end up getting it cheaper but the only way to know for sure is to dig into deeper. edit to add: 4) Know the market for advertisers in the niche. Are there dozens of national equipment manufacturers advertising all over the internet? Are there substantial local/regional advertisers specific to lacrosse (again here, equipment type comes to mind off-hand)? Does the governing body(s) for the sport at the high school level seem to attract a lot of sponsors, which you could then convince to cross promote directly with your site? Does the sport have, and do you have access to, any "affinity sponsors" that would be thrilled to take a chance on the site because they were so happy someone was doing it? What size fanbase (and therefore eyeball potential) does high school lacrosse have in the state? How much economic stress have HS sports been under in the state lately (since many of your potential sponsors may have already been hit up hard for donations/advertising/contributions)? I don't know the answers to any of those questions -- I'm not in MA, I don't follow lacrosse, and I know nothing at all about HS lacrosse -- but I'd advise you to be able to have reasonable & researched answers to most of those questions when you assess the likelihood of the site being self-supporting. __________________ "I lit another cigarette. Unless I specifically inform you to the contrary, I am always lighting another cigarette." - from a novel by Martin Amis Last edited by JonInMiddleGA : 08-26-2010 at 11:14 PM.

08-27-2010, 08:59 AM	#4
Icy Pro Starter Join Date: Sep 2003 Location: Toledo - Spain	The two answers above nailed it. Think on internet as just any other media, like TV or magazines. The more audience, the more you can earn from advertisers, so the key is to analyze the market that you will be targeting, in your case lacrosse. I know nothing about lacrosse or how popular is it, the competence you will have from other sites etc, so i can't talk about that. So about the question of if you will just cover expenses or will make some money, it's all related to the audience you can get, but have on mind that hosting is so cheap right now. Besides the minimum monthly fee, your hosting bill will grow as your traffic does, so it's not that it will get out of control as long as you don't stream video. Plain text, some graphics and a message board barely count for your hosting bills, as a sample, i pay around $1500 monthly on hosting for a network of over 100 sites with 500,000 visitors per day, in a very popular market, that is a really low cost for the return and for that amount of traffic (think that to buy a single monthly add in my network is already more expensive than that). If you add video streaming (like youtube) then the hosting bills will raise a ton and it's way easier to lose money if you are note careful. Also i don't think you need to start with a $4000 design for a fan/news/blog site, in fact you can use a free portal software like joomla with a free or even $50 to $200 template, a free board software like simple machines or phpbb, etc and have a nice site/blog/news site to start with and to know if you enjoy writing daily etc, that imho will be the bigger problem, as it's easy to get bored unless you are a huge fan of the thing you are writing and you really enjoy doing it even if just a couple of friends read it daily. Sampe of a site using joomla with a $55 template, i just googled for it, but there are a docens available in different sites: Joomla Sports Magazine For that price the template is not unique, it means other sites could be also using it, but you can pay somebody to create a nice logo and do some customization so it will look almost unique. If the site grows enough and you enjoy doing it, then you can think about a more professional design and about your hosting bill raising as the site does. __________________ Last edited by Icy : 08-27-2010 at 09:01 AM.

08-26-2010, 10:34 PM	#2
Router Help Registered User Join Date: May 2004 Location: Ferndale, MI now in Chicago, IL	Lots of generic answers but. . . 1. It certainly is possible to pay for hosting with ad revenue. 2. Adding a message board would add some load to a server but there is also more potential ad revenue there. 3. I didn't dig too deep but that site seems pretty deep. I know we'd charge much more than $3650 to do that, but you might get some independent contractor to do it for that much.

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