MySpace redux
The big headline on t.m today has been an insightful blog post from Mike Davidson titledMySpace: Unstoppable Force or Unnecessary Click Factory?. Mike raises an interesting point about MySpace. Basically, because of poor site design, users are forced to perform more clicks to complete a given action versus competing sites. Thus, pageview stats for MySpace are, in a sense, inflated and shouldn’t be compared directly to competitors. Moreover, because most of the pageviews on the site are produced as the user is traversing from point A to point B, these intermediary pageviews have little advertising value and may be a significant cause as to why MySpace’s average advertising rates are so horribly low (~ 10cent CPM). If you have a minute, read the post.
Some of my own thoughts:
- It is being suggested that MySpace intentionally has not redesigned the site to reduce the number of clicks to navigate the site because they want to maximize their pageview statistics. While there may be some truth to this pre-acquisiton, I don’t think MySpace has really benefitted that much from the hype spurred from it’s lofty monthly pageview stats. The typical MySpace user simply does not care about this. The only people that do care about stats like this are the people who have just recently created MySpace accounts to see what the fuss is all about (and afterward blog about how they finally “get” MySpace).
- It is true that MySpace is notorious for being flaky, cumbersome and just plain slow. While the site leaves much to be desired, I think it’s fair to say that it hasn’t deterred adoption by users. People come to MySpace to interact with people. There are an excessive number of clicks involved, but soon becomes automatic to the typical user.
- All this focus on CPM, pageviews, etc. is a waste of time. Instead of looking at pageviews, what really matter is maximizing the the average length (measured in time, not clicks) of a user session. Instead of looking at CPM, the only thing that matters is the total dollar amount extracted from each advertiser. Ultimately, advertisers will pay for performance upto their hard budget limit. If I have 10MM to spend on an online marketing campaign, I will identify which channels are bringing me maximum conversion and proceed to infuse as much of my budget into those channels as possible. It doesn’t really matter if I’m paying $.01 CPM or $100 CPM. All that matters to me is the conversion rate. (Of course, measuring conversion for a branding campaign for offline brands like Coke is difficult) The only way to increase conversion is to increase ad relevance. In this NY Time article it is mentioned that MySpace is currently improving ad relevance by serving ads based on deeper user profile and behavior data. This is what matters folks. If MySpace can successfully do this, they will quickly see more advertising dollars flow in from a larger pool of advertisers.
