Audience Value Formula

A framework for understanding how to monetize an audience based on their characteristics and behaviors.

Core Value Equation

• Value = (Influence × Spending Power × Willingness to Spend)
• Getting an audience is often harder than creating the product
• Having an audience with the right characteristics can lead to significant monetization opportunities

Key Success Patterns

• Focus on audience acquisition first

  • Building an engaged audience is the difficult part
  • Monetization becomes easier once you have the right audience
  • Example: NerdWallet took 3 years to reach $5M revenue, then jumped to $30M in year 4

• Audience Quality Matters

  • Not just about size - need the right type of audience
  • Must have influence over their decisions
  • Need sufficient spending power
  • Must be willing to actually spend money

Real World Application

• Media Companies

  • Need to understand their audience's spending capacity
  • Focus on building trust and influence
  • Can monetize through various channels once audience is established

• Content Creators

  • Should evaluate audience characteristics before monetization
  • Need to build genuine influence over their audience
  • Should align products/services with audience spending power

Key Takeaway

• The formula helps evaluate the potential value of an audience
• Getting the right audience is more challenging than creating products
• Monetization becomes straightforward once you have an audience with the right characteristics
• Focus on building influence and trust before attempting heavy monetization