JohnDeMayo.com: Internet Advertising Insight

Weekly Wrap-up, Oct. 15 – 21: comScore reach #s, Right Media/Yahoo deal, Oversee.net figures, and more

Welcome to the first installment of a new weekly post I will be publishing, the “Weekly Wrap-up”.  Here I am going to attempt to point to news of interest relating to ad networks, affiliate networks, and web publishers as related to direct response inventory for the previous week.

Advertising.com claimed the #1 spot in comScore MM’s Ad Focus ranking for the 29th consecutive month, reaching 84% of the US population.  While I have questioned comScore’s accuracy in regards to reporting demographic skews, I believe they are the most accurate service when measuring reach.  CPX Interactive made it's debut in this report at #9 reaching 56% of the US -- a lot of that growth is likely due to their purchasing inventory from the Right Media exchange mentioned below.

Right Media closed $45 million in funding, with Yahoo leading the round and acquiiring a 20% stake in the company.  Yahoo will partipate in the Right Media Exchange "open marketplace", "to offer advertisers the ability to bid on Yahoo!’s non-premium inventory through an open and transparent marketplace".  While I would classify the marketplace as more opaque then truly open and transparent, I think it will likely prove a valuable tool for Yahoo to more efficiently clear their remnant/DR inventory.  Keeping busy, Yaho also released it purchased AdInterax, a little-known rich media platform.

Performancing launched an ad network for blogs -- a space which, not surprisingly, seems to be getting more and more crowded.

A NY Times article (subscrip. req'd) featuring Oversee.net disclosed their annual revenues are running at a rate of more then $100 mil., interesting as previously they had not disclosed revenue numbers.  Seems likely the bulk of revenues are primarily from their domain services, and secondarily from their ad network and destination sites.

That's all I have in my notes for this week, stay tuned for next week's wrap-up.

MySpace confirms comScore traffic numbers, but how? Still doesn't smell right to me.

     The folks over at GigaOM called Ann  Burkart at MySpace to confirm the comScore numbers, and apparently she is saying they jive pretty well with what MySpace sees.  I don't know how MySpace could possibly confirm these numbers.  Their active registered users are obviously skew much younger then 35 -- you can see this simply by using their browse tool in smaller zip codes.  And if one makes the argument that the older demographic are not registered users and don't have profiles -- well then MySpace doesn't know how old they are when the visit the site, and therefore still shouldn't be able to confirm the numbers.

     If most people visiting MySpace are registered users, it seems obvious most visitors are under 35.  And if a large chunk are not registered users, I can't see how MySpace could claim to understand the average age of their visitors (given the don't have the registration data to look at).

comScore Media Metrix's analysis of MySpace's average user's age -- I don't buy it.

     Fred Wilson and others note comScore Media Metrix's analysis of MySpace, claiming more then half of their visitors are age 35+.  This just didn't sound right to me, so at first I justified it in my mind by thinking that the younger users use it more, which is indeed accurate, and made this statement above sound somewhat more plausible in my mind.

     But continuing to mull over it, this claim still didn't feel right.  I really don't think more then half of their monthly uniques are 35+ -- and I know far less then half of their pageviews are 35+.  But back to the monthly user count.  One can easily use myspace to browse for users of a certain age.  So picking out one particular zip code and using a 5 mile radius around it, I queried for users under 35 and saw 513, and then queried for users 35+ and saw 44.  Then ballparked the percentage of those users active in the last 30 days -- and it doesn't seem to change or skew the results.

     Maybe this particular zip code was off.  So move to a completely different part of the country thats a bit more urban.  Users under 35 = more then 3,000.  Users 35+ = 1703.  An it's harder to tell what percentage of accounts are active in the last 30 days here, but still, there doesn't seem to be much variance.

     Take a 3rd zip code = 3,000+ under 35, 548 over.  A 4th zip code = 3,000+ under 35, 900 over 35.  In all zips I'm looking at the vast majority of people registered are under 35, and of those the bulk of the accounts are indeed active in the last 30 days.  And a small % of these are bots or automated accounts.  There just seems no way  the comScore data can be right, unless for some very odd reason lots and lots of 35+ people browse the website but never create a profile, or tons of people lie (heavily) about being (much, much) younger then they are.

     So I don't believe the comScore Media Metrix numbers.  I think they are counting the head of household's age in their sample, but in reality it's the younger members of the household that are visiting myspace, and being counted as older people.  I think myspace both in regards to unique visitors, and by far in regards to pageviews, is dominated by a younger audience then the comScore Media Metrix anaylsis would lead one to believe.

     And I haven't investigated their panel methodology in a few years, but if it is the same as I recall the last time I looked into it, they could very likely be off quite significantly IMO.

     See also: MySpace confirms numbers, but how?

YouTube Revenue Estimates

    WatchMojo  / HipMojo has a few interesting posts on the possible revenues of YouTube.  While the numbers contain more detail and thought then most of the information out there, I think they are missing the boat on a few things.

See here:  http://www.watchmojo.com/web/blog/?p=500
Here:  http://www.watchmojo.com/web/blog/?p=504
Here:  http://www.watchmojo.com/web/blog/?p=508

     Clearing rate for page banner inventory via networks or direct marketers is probably closer to $.25/CPM, as compared to their estimate of $.75/CPM (which is where some other big sites clear their banner inventory).  This is primarily because:

-They are likely to have a very high frequency per user per day.  They estimate 66 million streams on youtube per day, but only 400k users to the homepage.  Even if total unique users per day are more then those on the homepage, there are a ton of pageviews per person per day on average, which drives down rates and ad effectiveness.

-The demographic skews towards those which monetize lower then average, for most direct response advertisers.

-The content skews towards that which normally monetizes worse then average, for most direct response advertisers.

    All in all worth talking about, in my opinion, as youtube is similar to many other media 2.0 companies -- where bandwidth is an ever increasing costs, and some of these sites are relying more on advertising and less on subscriptions and user-upsells.