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How does Blingo make a profit?

Discussion in 'General Business' started by Kuraptka, Mar 14, 2006.

  1. #1
    I know Blingo makes money when people click on the Google ad results when they research. But how do they make a profit?

    So, it says they have given out 1581 prizes for the past 30 days. Suppose each prize cost on average $25, that means they've given out $39,525 in prizes in the last 30 days.

    Now Blingo has an Alexa rank of 5,000. I know, I know Alexa rank doesn't mean much, but it IS a good approximator of website traffic. I suppose they have around 50,000 visitors a day maximum? So they'd get 1.5 million visits a month. Now, in order to generate $39,525 from ad revenue, they would need 158,100 clicks a month, if we assume each click is equal to 25 cents (I think the average cost per click a little less than this, but I'll be generous). That means they need 158,100 clicks a month just to break EVEN. That means 10% of their visitors have to click on an ad each day. 10% is a LOT.. and Blingo isn't doing any clever integration with the ads too, so I doubt 10% of visitors each day click on an ad.

    So that means Blingo must be losing money, and not just a little, but a decent amount each day. So how do they still manage to remain in business? Are they making money from other secret ways I don't know about? Is Blingo run by a wealthy philanthropist that just wants to give away prizes? Is Blingo cutting a stinkin deal with Google that gives them more ad revenue than the rest of us?! What's the DEAL?!!!!! How are they making a profit?!! This is just driving me crazy :D
    Kuraptka, Mar 14, 2006 IP
  2. lorien1973

    lorien1973 Notable Member

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    #2
    the winnings could be insured, too. Blingo pays x amount to an insurance company. if someone wins y amount, the insurance company pays for it, and blingo's rates go up a little, but they do not pay out the full amount themselves. That's how who wants to be a millionaire worked, until the insurance company got mad that too many people were getting too high prizes. If you kept the odds of winning really really low, then I'm sure it makes sense, somehow.

    EDIT

    But it doesn't look like they give cash:

    56 minutes ago
    Blingo Movie Ticket
    + friend

    1 hour ago
    iTunes Gift Certificate
    + friend

    2 hours ago
    Blingo Movie Ticket

    Still not sure how it works, but GCs are pretty cheap for companies to give out (branding). If you give someone a $10 itunes GC, and they don't have an account, chances of them spending over $10 there is pretty high.
    lorien1973, Mar 14, 2006 IP
  3. Kuraptka

    Kuraptka Peon

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    #3
    So if greater than X people won, the insurance company would pay for all the prizes? If less than X, Blingo would pay for the prizes?

    So how do they manage to make a profit? I doubt they make more than a few hundred a month aka pocket money. Is there something I'm missing?
    Kuraptka, Mar 14, 2006 IP
  4. lorien1973

    lorien1973 Notable Member

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    #4
    I bet the google search is an adsense search function...if you don't win, you probably click on a link and come back again. I don't think the economics are that difficult to overcome.
    lorien1973, Mar 14, 2006 IP
  5. Kuraptka

    Kuraptka Peon

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    #5
    What do u mean an Adsense search function? They give out 10 tries for you to win a prize. I know whenever I don't win after 10 tries, I just leave the site. I never click on their ads, ever. And they might get a discount for gift cards, but I doubt it's a hefty one. They probably might pay a little less than us regular Joes, but that's still not enough for them to turn a profit - even if I'm generous and each prize just costs them $10/each, they still would need $15790 in ad revenues just to break even. And their Alexa Rank is good, but I doubt they'd manage $15790 in revenue per month. So are they just wasting some poor venture capitalist's mola?
    Kuraptka, Mar 14, 2006 IP
  6. Dave.H

    Dave.H Peon

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    #6
    Blingo is a highly visited website with a very large amount of traffic. Wouldn't you want your company product advertised on it? Maybe Blingo is being paid by the prize companies. I bet they don't even pay for the prizes I bet the companies give them free prizes for the chance to advertise it on a large traffic site. Think about how often people who go on blingo check out the prize on their own site and become interested in it. Just a thought. Theres lots of ways that Blingo could be making money.
    Dave.H, Mar 27, 2007 IP