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The Origin of Advertising?

PaidContent pointed me to an article in AdWeek discussing the revenues/ audience disparity of MySpace and Yahoo. Essentially the article notes that while MySpace audience generates more page views than Yahoo, Yahoo's revenue is much larger.

[I]n December, with FIM [MySpace] posted 41.5 billion page views, while Yahoo tallied just under 36 billion.

MySpace was generating almost $25 million in ad revenue per month and growing at almost 30 percent per quarter, which would put its ad revenue in excess of $450 million by year's end. Yahoo had almost $1.5 billion in ad revenue in the fourth quarter of 2006 alone.

Hmmmm. This sounds familiar.

First off though, it should be noted that the reason Yahoo's revenue is so much larger is that it has a monetizeable search product. Search is where the money is. While MySpace may kick butt in page views, my guess is that most of those page views are either non-search navigation views and/or non-monetizeable search queries (queries like "Mike Markson" where no one has bought that key word). If they looked at non-search revenue for both companies, my guess is that they would be pretty close to the same. In other words, we're back to the overall issues with the publishing model online.

What's interesting about the article is it starts to delve into the metrics of non-search advertising. Reader engagement, number of page views per hour, profile page views, number of friends, etc. All of this is an acknowledgment that in a world of very exact metrics, traditional pageview measurements aren't enough.

I've always said that advertising is sold, not bought - and that advertisers will try anything once. It's getting to buy a second time that is the real challenge. To do that, you actually have to sell them on what success looks like. One of the senior folks at Tribune once told us that TV advertising started out with the direct response metric and evolved over time to the audience measurements we see today. Perhaps we're starting to see a similar evolution for online advertising.

If so, this is good news for the publishing industry.

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This page contains a single entry from the blog posted on February 19, 2007 10:50 AM.

The previous post in this blog was Lift Off.

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