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AM: FW: Pricing Suggestions

To:     "'ad-market@netpreneur.org'" <ad-market@netpreneur.org>
Subject:     AM: FW: Pricing Suggestions
From:     Mitch Arnowitz <marnowitz@morino.org>
Date:     Wed, 11 Jun 1997 16:24:18 -0400


On Monday, June 09, 1997 Ann  Shack <ashack@mcimail.com> wrote: 

> Problem:  our advertising model is a fixed cost per property per 
> year. Initial costs are high, so we would like to get as much cash 
> up front as possible. 

> How would you: 
> - learn how much cash they can advance, both to cover expenses 
> and to advance royalties 
> - decide the revenue splits
> -determine the length of the contract
> -other??

Ann-

I'll take a stab at one of your questions- deciding on revenue splits.
I'm making many assumptions here (your customer will be selling all 
advertising on the co-branded site, you've got your pricing model set,
your customer has been successful in past ad sales efforts, ad sales
don't involve 3rd party).

A good approach may be to start with a 50-50 split on ad revenue 
and try to end up in the 70-30 range, with you getting 30%. I have heard 
ad revenue splits anywhere from 60-40 to 85-15, with you getting 15%.
Is there a way for you to find out where the customer has ended up
with other negotiations of this sort? 

** Also- will you get a percentage of transactional revenue in these
relationships?-

Mitch Arnowitz <marnowitz@morino.org>
Business Development 
The Netpreneur Program  
1801 Robert Fulton Dr., Suite 550
Reston, VA 20191
v 703.620.8971
<http:netpreneur.org>




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