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Originally Posted by Matt 26z
If that is the case, then how do the tube sites remain in business? If the paid advertisements do not generate sales, then why do the same companies continue to purchase advertising?
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Mattz, one of the things that tube sites do (and torrent sites) is that they run non-related sponsors to make money. Poker, dating, pills, and so on. They have to run these things to really make the money flow.
In many cases, these are pay per click ands and not pay per sale ads. PPC is a pretty fun model because in many cases, people massively overpay for the traffic they get. Depending on the system, they may not entirely disclose your traffic sources, or may mix the clicks in such a manner that the buyer cannot easily figure out which sites work and which don't.
As I mentioned, the typical PPC sponsor on these sites is selling air. Super low production costs, super low maintenance costs, they are in the position to be able to pay 99 cents out of every dollar to acquire new customers because they aren't selling anything. Only the pill guys actually ship anything real, and you know what the markup is on that stuff!
From what I have been told, the average tube site is lucky to be about a 10% profitable deal. That 10% can be a pretty big number because of volume, but paying out 50k a month in bandwidth to take home 5k only sounds good. Why do you think so many torrent sites were here bitching when fleshlight dropped them? Because at 10% gross profit, you don't have much space for errors or lost income.