Futuristic Play by Andrew Chen: 5 things that make your social network monetiz... - The Diigo Meta page

• 06 Mar 11
  

  caitbun
• 03 Aug 08
  

  Jeff Walzer

  andrew_null network social network socialmedia online ads

  • I'll go through a couple of the critical challenges that affect social network monetization:

      
    1. Engagement is inversely correlated with CTRs
      
    2. Inventory isn't homogeneous, it's a pyramid
      
    3. Don't confuse interest with intent
      
    4. CPMs are driven by underlying value, not just targeting
      
    5. Brands are a big wild-card
  • Now from the advertiser side, you need to figure out what the underlying value is. After all, even if you get a ton of clicks, if you can't convert them on your side and have a good transactional value at the end, you won't want to pay a PPC.
  • However, the drawback is that the more pageviews people have your site, the lower the clickthrough rate gets
  • The reason is that interest in a topic is different than having intent. Having "skiing" on your profile is completely different than searching for "ski tickets." The latter means you're ready to buy, whereas the former simply means that you sometimes buy. This is GREAT for brand advertising, but really doesn't help on the direct response CPM formula
  • Having high intent typically drives a higher conversion rate (driving up the PPC) as well as driving up the CTR.
  • Furthermore, you really have to look at the underlying value of the transaction to figure out how the CPMs will turn out.

  • Now targeting really does help advertisements, but the problem with display advertising which shows as you are using a site is that the effects are not going to be as strong as high-intent areas.

      

    In this case, targeting might increase CTRs and conversion rates, but it's unlikely that it's so powerful it'll completely offset the value decrease. People are mostly interested in things that don't generate lots of money, and because of that, you have to compensate.
  • The place in the CPM formula that's really driving revenue is that impressions are getting bigger and bigger. What these sites can't make up via advertising efficiency, they are making up through pure bulk.

  6 more annotations...

• 08 Apr 08
  

  Christophe Claude

  advertising monetization social networks omfvortrag delicious

• 24 Mar 08
  

  Marc Lijour

  business finance marketing metrics network networking rates social web Web2.0 mt8216

• 20 Dec 07
  

  Vic Perotti

  advertising socialnetworking monetization business social web facebook digitalentrepreneurship

• 02 Nov 07
  

  bunnyfastard

  advertising cpm marketing

• 18 Oct 07
  

  Terry Jones

  monetization network social

Would you like to comment?

Join Diigo for a free account, or sign in if you are already a member.