In advertising, there is the concept of "above the line" and "below the line."
Below the line is anything that directly contributes to sales, and above the line is the less measurable stuff, like brand awareness (usually television ads, billboards, etc.).
I can think of a lot of cases where a web site should be measured by its reach rather than its immediate profit.
For example, a web site for a movie would measure its success in terms of trailers watched, time spent playing with interactive features, etc.
Web sites for cars measure success by the number of people who use the configurator, download brochures, or similar activities. It's very hard to tie monthly sales to monthly web visits, because the customer's consideration time is often much longer than a month.
Even a pure e-commerce site can't go on sales alone. Huge numbers of people use Amazon for product research, wish-list building, reading reviews, getting recommendations, etc. Just because they don't buy something every time doesn't mean it's not measurable. It's that kind of activity that cements Amazon's central role in many people's online shopping behavior. The lifetime value of a customer doesn't show up on a monthly sales report.
Determining the value of each touchpoint in a customer journey is an inexact and difficult science. There's an entire industry evolving to try and do that, called Attribution Management. One quite I've heard repeatedly from people in that field is "if you only count the places where money changes hands, you'd dismantle everything and just keep the cash registers."
The idea of a "revenue per month" metric sounds good on the surface, but it misses the entire value chain.
Remember I said this is in reference to a website/web app that
is a startup. Not as promotional material...or functioning as a loss leader.
Websites for movie trailers = promo material...not a startup.
Web sites for cars = promo material...not a startup.
An e-commerce site has to go primarily off of revenues and profits. Once they focus on revenues and profits, they can then invest in advertising (both above-the-line and below-the-line).
Amazon ran in the red for many years, because it invested heavily in the infrastructure. It raised equity financing, reinvested all revenues and profits and when it went public it raised huge debt.
Over the subsequent years, it paid down that debt slowly but surely with the profits thrown off of operations. Until the point that it has been profitable for the last few years. However, this point illustrates what I was talking about...they focussed on revenues first and then went to profitability shortly after.
Sorry, the article referenced doesn't mention startups at all. It just says the web development community should ignore pageviews and only look at monthly revenue numbers.
Below the line is anything that directly contributes to sales, and above the line is the less measurable stuff, like brand awareness (usually television ads, billboards, etc.).
I can think of a lot of cases where a web site should be measured by its reach rather than its immediate profit.
For example, a web site for a movie would measure its success in terms of trailers watched, time spent playing with interactive features, etc.
Web sites for cars measure success by the number of people who use the configurator, download brochures, or similar activities. It's very hard to tie monthly sales to monthly web visits, because the customer's consideration time is often much longer than a month.
Even a pure e-commerce site can't go on sales alone. Huge numbers of people use Amazon for product research, wish-list building, reading reviews, getting recommendations, etc. Just because they don't buy something every time doesn't mean it's not measurable. It's that kind of activity that cements Amazon's central role in many people's online shopping behavior. The lifetime value of a customer doesn't show up on a monthly sales report.
Determining the value of each touchpoint in a customer journey is an inexact and difficult science. There's an entire industry evolving to try and do that, called Attribution Management. One quite I've heard repeatedly from people in that field is "if you only count the places where money changes hands, you'd dismantle everything and just keep the cash registers."
The idea of a "revenue per month" metric sounds good on the surface, but it misses the entire value chain.