1) This post generated quite a bit of interest and I'm just now noticing that.
2) I will edit it this morning to include links to later discussions and discussions in comments that show how the conversation has evolved. This was the first post in October 18, 2007. Note that almost a full month has passed, and I've made maybe 2 or 3 more posts about it.
3) Note the "could" in the subject line. This was meant to convey uncertainty, even in the original post, about the estimates and assumptions I was making.
Original post follows
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Grains of rice in a 20kg bag: 1,000,000.
Typical cost of a 20lb bag of rice (retail): $15.99
Typical cost 50 lb bag of white long grain rice (wholesale): $11.00
Low estimate cost per 10 grains of rice: ($11 / (50 pounds)) * ((20 kg) / 1 000 000) * 10 = $0.0000970033954 / 10 grains of rice
High estimate cost per 10 grains of rice: ($15.99 / (20 pounds)) * ((20 kg) / 1 000 000) * 10 = $0.000352519157 / 10 grains of rice
Estimated hit rate for 1,000 grains of rice: 66%
Total page impressions for 1,000 grains of rice: 150
Low estimate cost for 1,000 grains of rice: $0.009700 ~= $0.01
High estimate cost for 1,000 grains of rice: $0.035252 ~= $0.04
Number of advertisers per page at FreeRice: 3
Low estimate payout per 1000 impressions (CPM): $10
High estimate payout per 1000 impressisons (CPM): $40 (same link as above)
Low estimate payout for 1 page impression: $0.03
High estimate payout for 1 page impression $0.12
Low estimate payout for 150 page impressions: $4.50
HIgh estimate payout for 150 page impressions: $18.00
High estimate cost for 1,000 grains of rice: $0.035252 ~= $0.04
Number of advertisers per page at FreeRice: 3
Low estimate payout per 1000 impressions (CPM): $10
High estimate payout per 1000 impressisons (CPM): $40 (same link as above)
Low estimate payout for 1 page impression: $0.03
High estimate payout for 1 page impression $0.12
Low estimate payout for 150 page impressions: $4.50
HIgh estimate payout for 150 page impressions: $18.00
Low estimate profit for 150 page impressions versus 1,000 grains of rice: $4.44
High estimate profit for 150 page impressions versus 1,000 grains of rice: $17.99
(fixed - was off by factor of 3 for page impression payouts)
(fixed 2 - was off by a decimal point for total cost of 1,000 grains of rice, in Free Rice's favor)
Question: Where does the profit go?
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End of original post
Since the original post, the following conversations/posts have happened:
- A discussion in the comments of this post with a person with web advertising experience in which it was established that the CPM (cost per thousand impressions) was likely not the model FreeRice was using.
- A short discussion on the use of unit conversion in my original calculations.
- Two more discussion (1, 2) of how wrong my original assumptions were.
- I wrote a letter to John Breen on October 19. So far, no reply. There was some discussion in the comments.
- Latest post: November 8. There was a little more discussion about my position about the site in the comments.
- On Nov 9, I saw this link, but didn't post about it.
- It's pretty likely that the ad model is not CPM (cost per thousand impressions), but more likely to be CPA (cost per action/clickthrough) with some sort of modification, possibly, for unique visitors per day. As such, these calculations serve little or no value aside from being a discussion point.
- It's pretty likely that the cost of the rice is not the only cost. There may be infrastructure building/upgrades included (yes, building roads, etc.). The charity the donations go to (from FreeRice) is a U.N. charity. I don't know their fee structure for the donations. There's definitely shipping or at least brokerage fees rolled in, and there is also honest administrative overhead to account for both at FreeRice and the U.N. charity involved on the delivery end.
- I still have a problem with the way the donations are represented. When you get 100 grains of rice in your "bowl" in the game, the bowl is full. That's what I call misrepresentation. If you're a rice eater, you may note that 100 grains of rice is probably not even enough for a bullet of rice under your sushi. It certainly isn't even enough rice to line your bowl one grain thick. It's not equivalent to a nutritious bowl of steaming rice to get you through the day. Also, rice is only part of what's needed to keep your body going, but let's leave aside the nutrition angle for now.
- I still have a problem with FreeRice itself apparently not being a 501(c)(3) charity. It means, among other things, that they don't have to make their ledgers available to anyone, to any degree, for any reason, unless an appropriate suit is filed. Until we see vetted figures, all of our work figuring out John Breen's probable profits will be guess work, no matter how fine tuned or accurate it is.
Page Summary
![[info]](http://p-stat.livejournal.com/img/userinfo.gif)
thymeenough : (no subject) [+3] - daktaklakpak : (no subject) [+6]
- strwdle : similar site idea [+1]
- nse_birch : FreeRice [+2]
- betsys : math question [+1]
- virtruvius : I agree [+0]
- rory_luolei : likely revenue from ads [+1]
- sharq : Heyokish posted a link to this, and something made me wonder... [+6]
- jkfan87 : It is not about cost/profit [+1]
Comments
So I figured I should just go find out what my time/pleasure was directing vis a vis actual money flow, and whether I wanted to play any more.
Answer: probably not, but that's just my poltiics.
Are payouts really that high for ads? Wow!
For smaller advertisers with smaller but unfocused reader bases (like Seattle Times), it seems like rates can go as low as $1.50 CPM. I had no idea what the positioning of this charity is, though, from a marketing/audience standpoint, so I just went with high/low estimates from what looked like average audience ad impression sets.
But who knows. I'm not in web advertising, so I just don't know.
The thing that confuses me however, is that most advertisers only count unique page views per day, so it would be unusual that someone playing 20 questions in a single day would be counted as twenty distinct impressions. Now, that's usually the case with CPC and I have less experience on the advertiser end with CPM, so it may be the case here.
Can you tell me who the founder is and where the anti-abortionist info came from? My (admittedly cursory) web search didn't turn up anything very useful, but since this site has hit my friends list five or six times I'd like to be able to get the word out.
Anyhow, I got the founder information because FreeRice.com calls Poverty.com its sister site (in the the FAQ). If you go to Poverty.com and look at its about page, you see it mention the name John Breen as the founder.
Double-checking with WHOIS for freerice.com and poverty.com verifies that John Breen would appear to be owner and founder of both efforts.
Googling "John Breen poverty" yields this result as the second ranked result. This paper may be by the same John Breen (not sure).
I don't really have a huge problem with an anti-poverty activist being an apparent Catholic anti-abortion thinker/activist as well. I find it pleasingly aesthetic that he's at least living his philosophy consistently. I may not agree with that part of his overall philosophy, but mostly I hope that the charity funds/resources he personally controls don't withhold aid to folks who disagree with his philosophies. A lot of charities do, and that's what I find objectionable.
It may be that freerice.com has worked out some kind of deal based on repeated exposure, which involves a lower value per impression but counts all impressions from a given source rather than just unique impressions. That would be an unusual fee structure, but might explain the disparity in average rates versus what they seem to be making.
As far as operating costs, for a company that's already hosting another web site, operating costs for a site like this should be *extremely* low. So either they're making less per impression because of the lack of unique visitors, or the money is not being handled wisely/ethically. It might be worth sending an email to freerice.com or poverty.com and asking for a breakdown of what they earn per click and how its spent.
I should clarify that it does disturb me that there's a potential for there being a big disparity between charity given and ad revenue for FreeRice, which is why I originally carried out this simple estimates-driven analysis. I have asked via their contactus form for a breakdown, but they can't respond directly, so maybe I should send to John Breen's contact e-mail in the WHOIS records?
How feasable is the whole ad revenue thing? rice is obviously pretty cheap but it may be a better idea to get sponsorship from music related companies (roland, yamaha etc) rather than page impression based advertising.
let me know your thoughts
thanks
Owen
it does seem like a cool idea, but transparency on the cost/profit would be appreciated.
But I would be quite miffed if the majority of the money made actually goes to help spread anti-abortion propaganda (especially in third world countries where overpopulation is such an issue). Or the possibility that it is funding anti-contraceptives propaganda in third world countries, which is closely linked to the abortion debate for Catholics. That would be highly counter-productive to me.
It may be that Mr. Breen is simply too busy to answer my query, or he may feel it's beneath him, or whatever. I don't really know. He could be so busy out doing good things that he doesn't have time for others' worries.
It's your choice whether you wish to give him the benefit of the doubt.
I hope that he actually IS doing good things, though, and that there are simply costs tacked on that we don't realize.
Grains of rice in a 20kg bag: 1,000,000.
Typical cost of a 20lb bag of rice (retail): $15.99
Typical cost 50 lb bag of white long grain rice (wholesale): $11.00
(cost/20lb)*(20kg/1,000,000 grains) = (cost/grain)
It's a sort of math that happens a lot in Chemistry, which was my undergraduate filed of choice. Normally you'd put a (2.2lb/kg) conversion factor in the left side of the equation too, but since Google takes care of that calculation for you, I didn't bother.
Now that you've visited, though, and apparently this particular post is generating a lot of attenion, I'll edit this post to make sure that it links to discussions forward of it.
Normally, though, as you know, being an LJ user, we tend not to go back and edit older posts when the discussion has evolved. The discussion follows the posts, not the other way around.
Number of advertisers per page at FreeRice: 3
Low estimate payout per 1000 impressions (CPM): $10
High estimate payout per 1000 impressions (CPM): $40 (same link as above)
While advertisers would be willing to pay for exposure on FreeRice, advertisers are still advertisers, and want something back. The problem is that the CPM scale works on page value. On a site like T3.com, for exampl e, the home page is worth a small fortune, and the reviews pages are worth even more (seeing as people are in the 'buying frameset' - i.e considering what their next purchase is going to be - and therefore considered to be more impressionable and easier to sell to). Other pages again, are worth significantly less, because people visit those pages frequently and get full banner-blindness. This is the case on forums, for example, where a visitor might visit 40-50 pages in a single visit (astronomical, in web terms), but not even look - far less click - on a single banner.
In the case of FreeRice, advertisers get sweet fuck-all out of their advertising, because people easily click on 200 pages, but nobody cares.
I wouldn't be in the very least surprised if each advertiser pays aound $0.50 per thousand impressions, so that's a CPM of $1.50. Suddenly, the maths work out a lot more evenly.
Finally, she's only taking into account the cost of the rice itself, which is a fallacy, as it is no good to anyone sitting in a warehouse in China. It needs to be bagged, transported, and distributed, which will easily cost more than the rice itself.
I think the guy probably is making some dosh (and, entirely honestly, I think that's fine, as it's a brilliant idea and a good project), but that the figures are a lot closer than we might think.
1) I prefer male pronouns these days, but if you'd like to refer to me asd "she", that's fine.
2) Clearly this particular post needs some forward links to the future posts about the FreeRice site. I don't wish to alarm you, but I am capable of taking feedback (especially kind feedback, but any kind will do, ultimately) and evolving my thoughts about anything.
3) I don't know if you saw it in this post (I'm thinking not), or in any of my later posts after this one, but I freely admit that my assumptions may be off. In fact, it is due to this particular discussion and discussion in later posts that I've learned a lot about on-web advertising, which is probably a good thing.
4) On the other hand, please don't insult anyone over this, including me.
I really didn't read on much further. In fact, my post was a response merely to a link to this post, conceivably taken out of a bigger context
Finally, I'm not sure how my comment could be perceived as being insulting, but it certainly wasn't meant that way. I've been in a bit of an odd place, emotionally, recently, and I'm a bit of an aspy at the best of times, so please do forgive me.
- H
The loaded words "absolutely phenomenal miscalculation" and "fallacy" are both easy to mistake for insults when I have absolutely no idea who you are, and no context with which to understand your comments.
Finally, speaking about someone in the third person on his/her own journal could also be taken as insulting, though truth be told, I just interpreted it as odd.
In any case, no big deal either way. Given you were responding to this out of date analysis, it's water under the bridge. I trust you understand my position better now.
Even at $1.50 a thousand, the maths are wonky for a "charity".
1000 clicks generates about a third of a pound of rice (there are about 29,000 grains in a pound).
He's donated "1,194,402,960" grains of rice.
Divide by ten, for number of clicks (let's undercount in his favour and assume that all clicks are "correct")
Divide by 1000 and multiply by 1.5 to get the income on your suggested CPM.
With the current totals, at 1.50 a thousand, he's generated $179,160.45
At a dollar a pound of rice (which is more than retail, when buying a single pound), that's 5,195,653,050 grains of rice. So we're missing about 4 billion grains of rice.
And that's before you work out the very low cost of rice bought in large quantities, where it's being bought and distributed by a major international aid organisation like the WFP
(if my maths have got tangled, please let me know. I have sunday afternoon brain on).
Click fraud will eventually burst the current dot com bubble. And this bubble burst will be FAR worse than the one in 2000. When it happens, unless google has branched out and started making profit on ANYTHING but ad sense (which they haven't yet) we could see them losing over $100 billion in a single week.
So don't be encouraging click fraud, even if it gives some starving people a few grains of rice. Becuae the resulting recession will create quite a few more starving people right here.
I don't know what sparked this: that I'm encouraging click fraud. I think I'm pretty much saddling that line between encouraging and discouraging the use of the site discussed here.
But good on ya!