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Just How Much is the Conversation Worth?
I've written before about the new comment replacement services including IntenseDebate and the new social sharing service FriendFeed before. After one of my posts, Robert Scoble noted that he had a discussion with an "a-list blog" and that the blogger wasn't willing to replace the comments with any of the new tools because of what he would lose in terms of monetization.
While blogs that aren't trying to earn direct revenue don't care as much about losing the pageviews and the impressions, blogs that are revenue-driven enterprises do. As a variety of blogs move out of the typical blog layer and into the new mainstream media layer, the ability to earn revenue becomes even more important.
Even just a switch to Ajaxy-comments where the page doesn't reload can cost a blog major yearly revenue.
I wanted to share some thoughts on just how much a large blog could be earning with their comments and the community that participates in the blog. Here's some simple math (I am lowballing the numbers):
10 posts a day
70 comments per post on average
-------------------------
700 comments per day
x 365 days
-------------------------
255,500 additional pageviews per year or "250 additional cpm's"
a large blog will typically generate an average of $10/cpm
-------------------------
$2,500 additional net revenue per year
The $2,500 figure seems pretty trivial right? Now let's push the math one step further - remember that when a person comments, they will typically want to come back, refresh the post to see if anyone has replied. My estimates here:
-- the users who submitted the 700 comments per day will reload the story at least one additional time after commenting - this leads to another $2,500 additional net revenue per year
Last step in the equation - how many people visiting the blog will reload the page a number of times to view and/or interact with the comments - on sites with major trollage, this number can be astronomical. Using our numbers above, I estimate that this could be a minimum of $25,000-75,000 per year. Again this is most likely a bare minimum and for large blogs with controversial content, this dollar figure could be way higher.
At the end of the day, a large blog could easily be generating more than $100,000 a year in commenting revenue alone. In fact, I'd argue that the pageviews coming from comments could be larger on many stories than those pageviews only attempting to read the story.
Now do you see why the large blogs aren't so willing to give their comments away to FriendFeed or IntenseDebate?
Allen - Interesting. Here's a question. I share quite a few of your posts in Google Reader (Feedly, etc.). They port to Friendfeed and other places ... and some are re-shared. Can't this new sharing to FF be creating a new audience, replacing some of the 'comment income' ?? Do you feel people click through or there's a need to monetize feeds themselves (or both)? I see your point but I also feel a lot of change coming in the 2.0 advertising landscape.
I look forward to the change - sadly the media industry is very slow to move - like the government :)
I think the FF traffic would be considered incremental and should not be considered as a replacement.
On prices, start in the stratosphere. So high their eyes roll back in their head, you hear their heart go into arrhythmia and they lose their breath. No matter where you land, you'll still make money. If you are in-the-know, you understand.
The bigger issue here is that of CPM and the fact it's a joke.
Anybody who thinks someone as a commenter refreshing a page more than once is a good person to be marketed to who is looking for your ad is sorely mistaken. That's why I think online ads on most blogs are a complete waste of time. For those exceptional blogs that have managed to make money, great, but I hope the advertisers know they're not getting good value.
Hey Louis, thanks for passing the FF exit on I95 and coming straight for a blog comment - I appreciate it! (seriously).
I agree that CPM might not be the best way - but as I've said so many times, until a new option comes that can be tracked, the agencies and brands won't go for it. Remember it took years to get them to go for online ads at all using the CPM model.
I do sure hope we find something better - would probably lead to better content as well.
Louis,
I don't see how this one is about CPM. I think Alan is simply saying that:
1) a blog with more traffic is easier to monetize and
2) additional traffic (gee) gives the blog owner more $.
As for CPM, well, I think it's just as bunk as PPC.
If you buy ads on a CPM basis which generate clickthoughs, you can easily back into your effective PPC.
How is that different than buying PPC directly?
Should it matter to advertisers if the clickthrough comes on the first view of a story, or on a comment refresh, as long as the effective PPC price/conversion rate is still within desired targets?
The bigger issue (if there is one) might be that without more disclosure about the history of each ad-clicker, PPC advertisers are still buying a lot of bot clicks.
Now we see why they are so picky about it. 100K and I'd be the same way!
"a large blog will typically generate an average of $10/cpm"
Can you name examples of blogs that get that? On average? I'd say on average it may be $1 (maybe $2 tops), if they get lucky. They will also need a person to focus on advertising and working with networks and agencies.
I have some questions regarding this calculation.
1. I look at CN and TC, and the other major blogs. 70 comments per post is a high average - TC is probably 30 or so, everyone else much less. Engadget probably gets the most, but I don't see them complaining about FF. Oh, that may be because only geeks use FF and nobody else cares.
2. While blogs sell $10/CPMs on their ratecard, the likelihood that every one of their pageviews is monetized at that rate is low. If you can post your weighted CPM rate, or get Michael Arrington or Mashable to post their's, please do. But my guess is, on average, the CPM rate of a blog that size would be closer to $3-4, maybe $5. Of course, every blog puts fifty ads on each of their pages, so maybe the volume of ad space counterweights this point.
3. Not 100% of commenters will come back. Maybe 10-15%.
4. On lively discussions, people may be coming back to see what happens, but again, lively discussions are not the norm.
Therefore I think the math should be something like:
10 posts per day x 20 comments = 200 comments, x 300 (nobody comments during holidays) = 60,000 pageviews, or 60 CPMs. At $5 cpm, thats $300. Pretend there are five ads per page, that's $1500. Then presume that you get 10% repeat visitors on comments, you're at $1650. Then pretend I am completely low-balling, and double that number.
$3300 a year, or a few hundred bucks a month. Doesn't seem that much to get so worked up about? Maybe put up six banners per page instead of 5, and call it a day.
Allen - I gave some thought to your calculations above, and did some analysis on them. I also came up with my own FriendFeed comments alternative calculations. I think FriendFeed still puts bloggers ahead, but see if you agree: http://tinyurl.com/5rtp48
note: comments may take up to 5 minutes to appear due to cache