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Subject: Does BGG need the Support Drive? rss

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Edward
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EDIT: Long story short:

1) It is unusual to donate money to a for-profit business like BGG (do you donate to Google?);
2) especially when that business already makes money off of you.
3) I would feel more comfortable about donating to BGG if it were financially transparent;
3) because BGG's traffic suggests that it should be able to pay for itself.

===

BGG has declined to make its budget transparent, so let's do a quick-and-dirty Fermi calculation of BGG's advertising revenue.

Based off of the 2011 analytics, BGG got 429M page views in 2011. Assuming $10 / thousand impressions, that would equate to $4.29M in advertising revenue.

Of course, maybe $10 CPM is too high. But even at $5 CPM (likely too low for the specialized, targeted ads that BGG serves), you're looking at $2.1M in advertising revenue alone.

Maybe CPM is inaccurate, and we should consider cost per clickthrough. At a typical click-through rate of 0.5% and $1 CPC (probably low estimates because of the targeted ads), that gets you to that same $2.1M number.

Now, I admit I have no idea what it costs to run the BGG servers or pay the BGG salaries. But whatever the number, it is at least an order of magnitude lower than what BGG is earning in revenue (i.e., at most in the hundreds of thousands), especially when you factor in its additional sources of revenue (its game promotions, for example).

This isn't meant to discourage or disparage donating in their support drive. But BGG is a for-profit business, after all, and it does seem like it should be doing well without resorting to donations.
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Cory J
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Is a $1 cpc typical of advertising rates? That seems hugely expensive to me. And then how much of that dollar would Bgg actually see? What would googles cut be?
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Richard Morris
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Trent Hamm
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A lot of those views do not include ads. Roadblock and subscriber blocking eliminate a lot....
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Derry Salewski
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You have the links to what it costs to advertie that much, but not what it costs to host that much of a website?

I mean. Your point is like 'here's a rough estimate of half my argument, and I know nothing about the other half.'

So I'm just like, um, ok!

But anyway, I guess I just view it as a way to sell something. They aren't really hiding that fact. Just pointing out that it might be worth buying. Not saying the station will go off the air if you don't support it.

Are they rolling in dough? I don't care. The point about it being worth it or not is valid either way. If I could choose what I'd pay for things, I'd pay a whole lot less for some of the games on here, and a whole lot more for the website . . .

But I'd be curious about all the information!

(pretty sure I got suspended on this thread last year . . . hah.)
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David Bailey
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Quote:

This isn't meant to discourage or disparage donating in their support drive. But BGG is a for-profit business, after all, and it does seem like it should be doing well without resorting to donations.


Meh. They provide a service I thoroughly enjoy and spend an embarassing amount of time with. How much they earn has no bearing on my decision to be a supporter.
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David Fair
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dbailey wrote:
Meh. They provide a service I thoroughly enjoy and spend an embarassing amount of time with. How much they earn has no bearing on my decision to be a supporter.


QFT
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CHAPEL
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Was wondering when this yearly thread was going to show up.
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According to the data in your link advertisers were paying $19.74 per conversion in 2011. "For some, the conversion action could be a sales transaction, a sales lead, a sign up, or a visitor who navigates to a key page on the site."

I just don't see advertisers willing to shell out $20 for every game they sell through BGG, especially the ones advertising for free online games.

MWChapel wrote:
Was wondering when this yearly thread was going to show up.


Yep it's that time of the year.
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Chris Cieslik
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I think the difference is that in years past, BGG needed the support drive to be able to continue existing. Now, BGG needs the support drive to be able to add on new and cool things. I'm happy to support either way.
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Chris B
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theory wrote:
BGG has declined to make its budget transparent,


And why would they? As far as I know BGG is a privately held corporation and is under no obligation to. I see my donation as a very small (considering the time I spend here and the value I get) user pay fee and I'm happy to do it.
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Ron
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As long as Aldie and Derk (and all the guys who make a living out of BGG) can pay their bills and buy their games, as long will BGG exist.

So if they buy a new Ferrari every day, just because the ash tray of the old one is full, this is fine for me, the more they will have an interest to keep BGG alive and well.

So, take my money! Get rich! But take good care of BGG meeple
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Dave Gray
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angelkurisu wrote:
I think the difference is that in years past, BGG needed the support drive to be able to continue existing. Now, BGG needs the support drive to be able to add on new and cool things. I'm happy to support either way.


I agree completely. I've been on and off BGG to leverage the value of the content prior to creating my own account this year.

The deeper I get into the site the more of a "dinosaur" feel of the BGG experience in that its often cumbersome and dated. E.g. Auction/Marketplace/Trades, Game vs extensions classifications all need a serious workover. I already get tremendous values from BGG and am more than happy to contribute under the assumptions the dollars are going to subsidize improvements. Given the scope of the endeavor and the plans I've heard floated around, there is a need. Fat cats are not being created.

As a web service and infrastructure engineer I see tremendous possibilities to vastly improve on the currently impressive value with existing capabilities. This takes developers, planning, design time, QA, etc.

Hell, in additional to a small monetary donation I'd be happy to donate my own time and tech skills as well. I have confidence initiatives like this are underway and am happy to contribute to make these a reality, even if in monetary support only.

As a web entrepreneur I understand the enormous commitment of time and resources (time and funds) to take an operation of this size forward in a controlled and practical way. The last company I started and operated in an annual budget of approx. 10M/yr. The scope of services provided are pretty analogous in scope to the BGG site, web application offering, API's, etc. And guess what, the engineering and technology improvement was always short on budget and time.

In short, in my experience, it is absolutely necessary at this stage. I hope the annual drive is a great success.

-dave
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Russ Williams
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theory wrote:
This isn't meant to discourage or disparage donating in their support drive. But BGG is a for-profit business, after all, and it does seem like it should be doing well without resorting to donations.

In my observation many successful for-profit public-website-based business include donations as part of their revenue. They provide a service, people pay for that service, just like in "the real world", except on the web the people who pay do it voluntarily.

And yeah, like others have said, I suspect you're overestimating the money they get from ads, for several reasons (e.g. bogusly assuming that every page view means ad views).
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rekinom
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Amyrin wrote:
Is a $1 cpc typical of advertising rates? That seems hugely expensive to me. And then how much of that dollar would Bgg actually see? What would googles cut be?


It's highly variable and depends on the keywords. You can sign up for AdWords account for free and test out some keywords if you are curious. I have my students do this as part of a project (hence, I already had this image made up showing the steps to do it.)



Google's cut is generally about half. So if the average rate is $1.00, their cut would more likely be half ($0.50). This is roughly in line for my own experience with ad revenue on a much smaller basis since 2010.

Besides all that, $25 a year is a good deal for adblocking and supporting this site. I wish more sites had this option.
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Jim F
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I pay more for services I enjoy less. Less deserving people make money from me than Aldie and co. Good luck to them. Not to forget contributions are voluntary.
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Vidhya Aravind
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They make something that we gamers as a niche enjoy and use. I don't care if they are rolling in dough, I still don't mind throwing more money their way. Besides, it's not like you have to donate. They're not holding any content hostage!
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How DARE the owners of BGG make money on something that they should do simply for the love of the hobby! angry

Plus, think about the chiiilllddrrreeeennnn who won't be able to eat because of all the people who simply MUST donate to BGG!!!! Surely there's a crime being committed here somewhere!!! cry

(is this where I insert the /sarcasm tag for those whose sarcastometer is broken?)
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theory wrote:
Based off of the 2011 analytics, BGG got 429M page views in 2011. Assuming $10 / thousand impressions, that would equate to $4.29M in advertising revenue.

Erm... not even remotely accurate. $10 CPM might be the going rate with video games, cell phone providers, motor vehicles, and music labels, but in the board game industry you're looking at $1 CPM. I completely agree that such targeted advertising generally commands a premium, but it's just not realistic in the business we're in.

So, you're overshooting the price by a multiplier of 10, and also assuming all of the inventory is sold. Unsold inventory is filled with adsense, which pays significantly less.
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theory wrote:
BGG has declined to make its budget transparent, so let's do a quick-and-dirty Fermi calculation of BGG's advertising revenue.

Based off of the 2011 analytics, BGG got 429M page views in 2011. Assuming $10 / thousand impressions, that would equate to $4.29M in advertising revenue.

Of course, maybe $10 CPM is too high. But even at $5 CPM (likely too low for the specialized, targeted ads that BGG serves), you're looking at $2.1M in advertising revenue alone.

Maybe CPM is inaccurate, and we should consider cost per clickthrough. At a typical click-through rate of 0.5% and $1 CPC (probably low estimates because of the targeted ads), that gets you to that same $2.1M number.

Now, I admit I have no idea what it costs to run the BGG servers or pay the BGG salaries. But whatever the number, it is at least an order of magnitude lower than what BGG is earning in revenue (i.e., at most in the hundreds of thousands), especially when you factor in its additional sources of revenue (its game promotions, for example).

This isn't meant to discourage or disparage donating in their support drive. But BGG is a for-profit business, after all, and it does seem like it should be doing well without resorting to donations.



I'm really curious... and I ask this in the friendliest way, but do you ask your plumber to see his accounts, or your local restaurant? Or buskers you pass who are giving free entertainment?

I'm what we used to call a bit of a lefty. I have real trouble with private enterprise sometimes and think that more collectively Government-owned companies, particularly utilities, is a good thing. For example I don't think phone companies should be in private ownership.

BUT we live in a capitalist system. Businesses and their owners make a call on their business model. BGG is fantastic as it can be free, or you can pay to block ads- a premium service. I also accept it's none of my business what they spend the money they get on. If Derk and Aldie want to run BGG from a yacht in the Bahamas and the model allows it- fantastic.

My take on the fundraising is because Derk and Aldie don't work from a 100ft yacht and can't afford to. The cost of BGG - the IT the storage, legal issues etc.... is expensive. The fundraising means they don't have to try and implement a paid subscription (which is what I think they are trying to avoid).

Can I suggest if you are really burned by people asking for money or making too much you might want to have a look at some of the large corporations you know and find out where they spend the money they make from you. I was reading some very disturbing stuff about large oil interests in Texas recently where local impoverished communities are being squeezed by huge businesses with political connections. Let the Revolution start there- not with BGG.
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Dave C
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Wow. The OP has posed a ridiculous question.

Let me entertain it for the next few seconds. Does the website have value? Am I willing to pay for it?

Yes.
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Jarrett Dunn
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theory wrote:
BGG has declined to make its budget transparent, so let's do a quick-and-dirty Fermi calculation of BGG's advertising revenue.

Based off of the 2011 analytics, BGG got 429M page views in 2011. Assuming $10 / thousand impressions, that would equate to $4.29M in advertising revenue.

Of course, maybe $10 CPM is too high. But even at $5 CPM (likely too low for the specialized, targeted ads that BGG serves), you're looking at $2.1M in advertising revenue alone.

Maybe CPM is inaccurate, and we should consider cost per clickthrough. At a typical click-through rate of 0.5% and $1 CPC (probably low estimates because of the targeted ads), that gets you to that same $2.1M number.

Now, I admit I have no idea what it costs to run the BGG servers or pay the BGG salaries. But whatever the number, it is at least an order of magnitude lower than what BGG is earning in revenue (i.e., at most in the hundreds of thousands), especially when you factor in its additional sources of revenue (its game promotions, for example).

This isn't meant to discourage or disparage donating in their support drive. But BGG is a for-profit business, after all, and it does seem like it should be doing well without resorting to donations.


Disregarding rates and all, and even hosting costs. Do you know simply what the cost of the bandwidth is on a monthly basis? They aren't simply running this off some cable connection they pay $50/mth on.

Look at it this way, a SINGLE OC-3 line (which they are probably running more, I know at the mid-sized bank I work at we have around 3-4) is $37k/mth + $8k setup fee. Figuring they've recooped their $8k setup fee by now that alone is $444k/yr with just ONE 155mbps line. Given the number of people they serve it is probably at least 2 which is close a $1 mil a year in bandwidth costs alone.
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GearPimp wrote:







I have no idea what you wrote.

I was mesmerised by your avatar. Makes... me ...feel ... sleepy...
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Trent Hamm
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mltdwn wrote:
Look at it this way, a SINGLE OC-3 line (which they are probably running more, I know at the mid-sized bank I work at we have around 3-4) is $37k/mth + $8k setup fee. Figuring they've recooped their $8k setup fee by now that alone is $444k/yr with just ONE 155mbps line. Given the number of people they serve it is probably at least 2 which is close a $1 mil a year in bandwidth costs alone.


I don't think their bandwidth needs are that high. They aren't throughputting lots of data here.
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SamNzed wrote:
I was reading some very disturbing stuff about large oil interests in Texas recently where local impoverished communities are being squeezed by huge businesses with political connections. Let the Revolution start there- not with BGG.


BGG is a Texan company is it not? I'm just sayin'

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