Getting the Small Bytes: An Unique Business-Model Made a Million

In the mid-nineties, a new American dream surged through generation X and ended with the dot com crash in 2000. It didn’t die after those would-be businesses became unconnected. There are still visionaries randomly scribbling Napkin Plans down on their lunch hour.

Alex Tew is one of these visionaries. Twenty one at the time, he began dreaming up ways to finish his bachelors at the University of Nottingham with little of no debt. Five months later he was almost a millionaire.

Tew’s brainstorming session resulted in the beginning of the Million Dollar Homepage. A site dedicated to making money the old fashion way: selling advertising space. He sectioned off a 1 million pixel sized area on his newly created website, intending to sell every pixel for a dollar a piece. However, a one inch squared box contains about five thousand pixels; thus, one pixel doesn't allow the advertiser much room to create a meaningful message. In light of this, he sold the space in 10 X 10 “Boxes,” Tew said. The ads have an additional option to link the ad to a URL or landing page.

An advertiser buys space believing people will see their ad and react to its message by buying, visiting the URL or simply remembering the name. In order to facilitate this, Tew needed to drive traffic to the site. But why would anyone bother visiting his cluttered website? Popular Mechanics said, "There's no content. No cool graphics, giveaways or steamy Paris Hilton videos for viewers to salivate over.“ He relied completely on the novelty aspect.

With his first $1000 in revenue - received from the sale to a friend who owned a music site - Tew sent out myriad press releases to the British media. Following these releases, the BBC Online, The Daily Telegraph and other news media featured stories about the Million Dollar Homepage. He even appeared on national television programs to discus his story and vision. The coverage grew outside of Tew’s home country, into Germany, China and America, in publications such as Adweek magazine, the Wall Street Journal and on Fox News.

As a result of the world wide media frenzy, the website began to see a dramatic increase in page views. Inside of two months, Tew said the site received over 65,000 unique visitors, became the most "Digged" links of the week on - a Pure Play known for ranking website’s popularity - and before the end of his first year he began receiving over 25,000 unique visitors per hour.

Professor Martin Binks, director of the Nottingham University Institute for Entrepreneurial Innovation, said, "It is brilliant in its simplicity ... advertisers have been attracted to it by its novelty ... the site has become a phenomenon."

Within five months Tew announced there were only 1,000 pixels left, and in high demand. As a result, he placed the surplus on eBay auctioning it off to the highest bidder. In a little over a week there were almost a hundred legitimate bids. Bids were placed at over $150,000; but Tew “Contacted the people by phone and turns out they weren't serious,” he said. - an online retailer of diet products - placed the winning bid for $38,001.

This final sale put Tew over his initial goal by $37,000 dollars. After donations, expenses and taxes, he said profits totaled almost $700,000.

For the advertisers, their ads will last for five years. Tew promised to keep the advertisers ads on the site until the end of this period. After that time, he will remove all the ads, but hasn’t announced any plans to sell the newly available space.

Business Model

Tew employees the advertising internet-business-model to generate revenue and simultaneously attract visitors; however, the Million Dollar Homepage executes this tactic in a unique manner. Traditionally, advertising models pimp out sections of the site for a price, usually based on CPM (Cost Per Thousand visitors) or Click Through Rates, and attracts traffic to increase the sites value to the customer, as well as the price of the site. And the length of time allotted is broken down into months, weeks, etc.

Deviating from this model, the young entrepreneur’s version doesn’t sell space based on page views but by a set $1 per pixel. And he didn’t raise the price until auctioning off the last 1000 units. In place of the CPMs, he is creating interest and promising a potential for an increase in page views to create value for the customer. Even the ads run-time is part of the appeal, promising a five year stretch.


Determining the amount of success a website obtains can be complicated. Depending on the marketing goals and the business model, different evaluation metrics can be used to measure and evaluate how successful the marketing tactics have been.

Tew’s goals are clear: Make a million dollars by selling ad space, build awareness of the site and sell all the pixels. These goals can be placed into two categories on the Balance Score Card system of measuring effectiveness, a method created by two Harvard Professors. The system has four perspectives: Customer, Financial, Internal, Learning and Growth perspectives. The monetary goal falls into the Financial Perspective and the other three can be placed into the Consumer Perspective.

Measurement of the Consumer perspectives are straight forward and easily done. Once all of the pixels are sold, the goals are met. Building awareness can be determined through an analysis of the areas media has covered his story. Tew is very successful in this perspective. He obtained coverage in several countries, in print, online and on TV. Finally, his sales goals can be measure by the number of pixels sold. Additionally, a qualitative measurement can be derived from the increasing demand for the last pixel box. The amount of money advertisers were willing to pay reflects Tew’s success creating demand.


Kurt said...

Great class presentation, Kevin. Your post contains a good review of the business model and uses the balanced scorecard to measure outcomes. As we said in class, wish we had been clever enough to think of this!

Grade - 5

Post a Comment