News Update :

Social Media Data--Free?

Wednesday, June 4, 2008

Social metrics service Sometrics launched in beta last fall and was opened to developers in March. The stated purpose was to allow developers to track the performance of their apps on selected social networks. The new firm received venture funding in May amid questions about the viability of their business model. This is what they said in an early press release:

The Sometrics analytics solution will always be free and we'll never share or make your data public without consent. As FB developers ourselves, we understand that privacy is a major concern. Therefore, Sometrics doesn't collect any personal data such as names, contact info, etc. and all aggregate metric data (gender, age, etc.) cannot be linked back to an individual.

The question about how they intend to monetize the service became clear today. They’ve launched an ad-serving network and say they hope to raise the CPMs from ads placed on social media sites. CPMs overall have been going down. PubMatic, another relatively new firm, provides free data—do we see a trend here?

The downward trend is pretty obvious. They add:

•On average, Web site monetization dropped by 23 percent from 49 cents in March to 38 cents in April.
•Among the verticals, Social Networking led the plunge with monetization dropping 47 percent, from 37 cents in March to 19 cents in April, below January lows of 22 cents. Entertainment monetization dropped 17 percent from 40 cents in March to 33 cents in April. Gaming and Sports were down marginally (4 percent and 5 percent, respectively). Technology remained relatively flat at 83 cents in April vs. 82 cents in March, but is still off January highs of 92 cents.
•In April 2008, 77 percent of Small Web sites garnered net publisher eCPMs from ad networks of under $1.00, compared with 95 percent of Medium Web sites and 100 percent of large web sites.
•Across all Web sites, the range of eCPMs was $0.002 to $18.45.


Their AdPriceIndex is free and looks as if it’s going to be worth watching. How do they do it? Their business is optimizing ads for publishers and they collect data from those activities to construct an index of ad network pricing. It’s not representative of all advertisers (the data presently comes from 3,000 publishers), but it’s instructive—and previously hard to find.

Back to Sometrics. Media Post says:

By virtue of its social hyper-targeting, Sometrics expects to be able to deliver CPMs of $1 to $2 for application-based ads, which typically command rates of 10 cents to 80 cents today. The company's system could also be used to serve premium and remnant display advertising on social networks.

Comparing that with the PubMatic stats, $1 to $2 would be highly attractive—if they can pull it off. Marketers have not been entirely satisfied with advertising forays on social networks (subscription required). An article in Ad Age earlier in the week says some high-profile campaigns on social network have total media spend approaching $25,000 per viewer film submission. That’s not advertising per se, but it’s a really high acquisition cost! In terms of CPM itself, a post on the Inside Facebook blog quotes reader/advertiser CPMs from over $4 (grain of salt) to 4 cents. The post drew interesting comments with more reader submitted CPMs. But you get the idea.

Several things are going on here:

Business models: New marketing services firms in this space are providing paid services and generating free data about the space, presumably with the full knowledge of their customers. Is that good for the growth of social media as a marketer communications channel? Assuming the data is valid, absolutely! Reliable data is one of the missing components in this space.

Cheap inventory on social networks: We’ve probably all read statements to that effect. These data appear to confirm that. They may also support the assertion that cheap inventory on social media sites is driving down CPMs across the web.

Ad targeting and tracking: Advertisers have been looking for opportunities that really work in social media and it seems evident that careful targeting is part of that equation. Tracking is essential to know what is working. What strikes me on several of these sites/posts is that they are talking about developers tracking the success of the apps they write for social sites. Where are marketers? These are our emerging channels; are marketers deeply involved in these programs? I hope so!

The beat goes on, with no end in sight to developments in the social media space. Data that helps us understand trends is welcome—especially when it’s free!
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