Poll: What is your pre-tax net profit for fiscal year 2003-2004?

[Czar]

Greetings fellow geeks,

In what has become somewhat of an annual tradition around here, the time has come once again to run a confidential earnings poll to track the general state of the online advertising/web publishing industry through a sample of our membership.

Previous polls:
2001 calendar year - http://www.geekvillage.com/forums/sh...threadid=11635
2002 calendar year - http://www.geekvillage.com/forums/sh...threadid=21181

In the interests of consistency and tradition, this poll will share the same criteria as Steve's previous efforts, with the one significant change being its focus on fiscal/financial years rather than calendar years. The reasoning behind this is that reports generated for tax reporting processes are more likely to give an accurate representation of a company's annual earnings activity than a calendar-year report.

Time span:
As per the discussion below, it's is clear that many of us work from different fiscal years. The figure that should be put forth in the poll response above must reflect gross operating profits generated by our members during their last complete annual reporting period. This can be July 03 - June 04 if that is your standard financial year, Jan 03 - Dec 03 if you have aligned your financial and calendar years, etc.



The following instructions are an approximate replication of those used in last year's poll:


Translations:

2 digits: $US 10.00+
3 digits: $US 100.00+
4 digits: $US 1000.00+
5 digits: $US 10000.00+
6 digits: $US 100000.00+

Definitions:

"What is your pre-tax net profit for fiscal year 2002/2003?"

1) See above. Please use the 12-month period accepted as the financial/tax year in the country in which your company/business is based.

2) "pre-tax net profit" for the purposes of this poll and a ballpark definition for self employed folks is :

I cashed checks for $12,000.00 in INCOME from CPA, CPM, and CPC campaigns during the last financial year. That's your gross and NOT your net. It's never your NET as all business have expenses.

I spent a total of $7,000.00 for the period 1/1/02 through 12/31/02 for EXPENSES like hosting, advertising, custom coding work, rent, salaries, graphic artists fees.

My "...pre-tax net profit for calendar year 2002" is NOT $12,000.00. My pre-tax net is:

$12,000.00 minus $7,000.00 = $5,000.00

3) Comments often heard: Dude1: "Dude! I'm making 3k per month.

Dude2: Are you positive of this? Is that number gross or net? Is that number after you pay your taxes? Is that number your pre tax net?

Dude1: <gulp>


Please post in this thread if you require any clarification. Good luck and thank you for assisting to generate an accurate presentation of our membership's progress from year to year.

[Czar]

Originally posted by coolbuddy
dude,Its nice idea but pretty late.
Now everybody is thinking of 2004-2005 fiscal numbers.

There's not a company on planet Earth who will be able to verify their 2004-2005 numbers for months, whereas we're right in the middle of reporting season for 2003-2004 fiscal in most major markets right now.

In fact, unless I'm mistaken, the US fiscal year ends September 30, which means that this post is being made a mere 22 days after the close of 2003-2004 fiscal. No meaningful numbers are likely to emerge before then so unless you're interested in working from projections, I don't know how this thread could be construed as late.

Admittedly, those based in Canada, India or Japan, for example, may have long closed the books on 2003-2004, but they're still nowhere near finalising next year results given that my calendar still says we're in 2004.

Am I missing something? Is it too confusing working from fiscal years rather than calendar?

[Czar]

Welcome back Bob. Great to see you here.

Thanks for the clarification. The following guideline adjusts the criteria accordingly:
- For the purposes of this poll, we'll keep the base criterion as the 2003-2004 fiscal year where possible. Companies that use the calendar year as their reporting period should use figures from their last complete annual P&L (Jan 2003-December 2003) instead.
- For clarity, the poll above reflects gross operating profits generated by our members during their last complete annual reporting period.

I shall edit the opening post to reflect this.

Thanks again.

[Czar]

Definitely interesting.

While the sample size at present is insufficient for any meaningful analysis, it is already producing some interesting results when compared to years prior. It seems that fewer members are in the red and that many of those who are generating profits have extended their earnings quite substantially given the relatively short time span that separates these three polls.

The participation rate is also looking good and may itself indicate greater confidence in the market.

Let's see how things evolve...

[Czar]

Very good point. I have edited the original post to clarify that we're talking about $US, not $AUD, not Euros, not Yen, not Yuan, not Turkish Lira, not Afghanis and not Argentinian Pesos.

Those working in alternative currencies should convert at the approximate exchange rate in place at the end of your last financial year.


I pity the fool who can't convert currency. </ Mr. T >

[Czar]

Originally posted by coolbuddy
I wish I could do the same.

You can. If you're living in the USA, you can take advantage of currency fluctuations as much as anyone. If you were to partner with a European ad rep that pays its publishers in Euros, you would automatically be presented with some freedom in terms of timing your deposits, weighing your national expenditures, etc.

Like Eriky, I've increased resource expentiture in Australian and other non-US markets since the $USD began its value tumble and will likely reverse that balance as the greenback eventually strengthens against the Euro and $AUD, which may start to take place after the next election is decided.

Adopting this strategy simply gives you another opportunity to play the margin game and to subsequently increase your net effective earnings without necessarily increasing your traffic, reach or gross marketing expenditure.

[Czar]

coolbuddy, just to assist in your calculations for the coming economic armageddon, please note that the total European web audience is greater than the total North American web audience according to Nua Internet Surveys. In fact, even the Asia/Pacific audience was greater in numbers than North America as far back as 2002. Also, given that Chinese and Indian net populations continue to rise at far greater rates than those of the early adopting nations, this balance is set to tilt even further in coming years.

It's partially for this reason that savvy online marketers are taking strides towards presenting their websites or interactive advertising campaigns to international markets, whether these markets speak the same language as the marketer or not. Witness our new guide to regional and international internet marketing for tips concerning how to enter these markets. Might be worth a look for you in particular, since many of your recent posts suggest that, for some reason, you have no faith in the immediate future of the US economy.

[Czar]

The language barrier may be hard to overcome for some, but others may take advantage of their own knowledge of multiple languages or commission the services of professional translation services to enter high-growth markets. English is my first language, for example, but I've developed search marketing campaigns in Spanish, Norwegian, French and Russian. I've also worked with translation companies to translate and encode sites for myself and my clients into various Asian languages. Most of the services I employed were relatively inexpensive (not much more than using a professional copywriting service in English).

I'd like to know from where you are sourcing your geographic stats. USA at-home internet penetration has actually been declining in recent months, according to Nielsen//NetRatings, while India's net population has grown at far greater rates than the 30% you suggested every year since 2000, to reach approximately 37 million users presently (according to the Computer Industry Almanac). It's current usage level places it within the 5 most connected countries in terms of total audience, above the UK, France and South Korea.

Anyway, I was just making a suggestion since on one hand you seem to be the doomsayer of the US online media market. It would seem logical, then, that you might like to embrace other markets in order to further diversify your revenue sources, but if you would prefer not to do so, I'm not going to argue.

Regarding the slowdown of ad rates, if you were around pre-2001, you would have noticed that online ad rates used to be even higher than what they are now. Of course, they were artificially inflated at the time through huge injections of capital, high demand and comparitively low supply, but those who survived the massive online ad crash of a few years ago will have no trouble enduring the smaller adjustments that are bound to occur periodically from this point forward.

Fortunately, while advertisers are receiving positive returns on investment (ROIs), they're unlikely to give up on the medium and since online media remains comparitively inexpensive in relation to the broader media market, I don't see any adjustment being dramatic during the next few years. Online's just too darn cheap and effective to fall over any time soon.

[JP Sauve]

Yes, the exchange rate is making a HUGE difference. I used to get up to $1.55 CDN for every $1.00 US. Now it's more like $1.15. CDN. The 40 cent difference is very substantial, and seems to be getting worse. This is sadly real money that's lost and effecting the bottom line.

Want an example to see the difference? If we pull in $25K US in a month, it used to work out to $39,000 CDN. Now with the lower exchange it's more like $29,000 CDN. That's a $10,000 difference EVERY MONTH.

...that difference is $120,000 CDN missing over the year! To put it in perspective, that's enough cash to pay for a fair sized mortgage for a year, take the family on a big vacation, and come home to buy yourself a BMW... gone.

What really pees in the wound is that if we bust our chops to boost traffic/revenue by say 20% (which is nice growth), we still end up making less than we did a year ago because of exchange rate.

Yeah, the current exchange rate hurts.

[wsz]

The currency exchange rate makes a huge difference for some of us. This past year has been like running faster just to stay in place.

Compared to a couple of years ago:

I have more and better content, reputation, visitor loyalty, and personal know-how. That results in more dollars from both CPM and CPA.

Unfortunately, those dollars are American, and have become much smaller vs. my local currency. It now takes more US$ to support myself then it did in, say, 2001. If I had my current US$ income plus the old exchange rates, I would be rockin'

This is why I am starting to work more towards non-US content, traffic, sponsors, and currencies, especially since I don't have much confidence in a US$/US- Economy recovery in the next four years or so.

[Martin64]

Interesting, but not shocking, results.

[Martin64]

Originally posted by MarkJH
I guess you should also clarify that the poll is referring to a common currency - US dollars? Otherwise, it would be meaningless. I'm a multi-millionaire in Turkey!

Does it really have to be clarified? I'm sure you, me and even Mr. T knows we're talking in US dollars.

btw, good for you that you're a mulit-millionaire.

[Nintendo]

Here in the URL, tax wise our year is from January 1st to December 31st, in the eyes of the IRS, so many of us won't know how this year will be like until about the end of the holiday season.

2003 was $17,828.00, and this year'll be way higher than that.

:::US fiscal year ends September 30

I think that's about when the US Government ends there fiscal year and starts war over the next years budget. Almost all business in the US go with Jan 1st to December 31st when it comes to keeping track of there earnings.

[brian 2468]

Great to see folks are shaking the dollars out of their sites...................

[Eriky]

Althought it's in euro's, i voted the 5 digits. I'm getting a slightly above average income from my sites and web hosting business. The decreasing value of the dollar is not doing much good for me, so I'm spending more time now on my 'euro'-business which is web hosting in my own country, the Netherlands. I don't see the dollar increasing in the near future, the US is certainly not something I want to rely on for my future income