A Tale of two CPM's

Monday, April 28. 2008

Sme time ago a certain 24/7 Media wrote about blog and social media valuations somewhat optimistically, with CPM's in the $10-$30 range. We of course were somewhat surprised, continually opining that this was probably overestimated in today's marketplace to one, if not two orders of magnitude - now some more real evidence emerges of real CPM's from Facebook applications:

current Facebook app developers on what they’re making on a CPM/eCPM basis from ad networks serving the Facebook Platform:

tspree15 is making $0.60 CPM with Social Media
cbovis is making $1.50 CPM with VideoEgg, but they can’t cover all his inventory (the rest runs on RockYou)
sweetsteve is making $0.27 CPM with Cubics, down from $0.43 earlier this month
ejono is seeing a $0.40 CPM with Cubics
cory is making a $4.78 eCPM with Social Media (???)
mzeitler is making a $0.50 CPM each with AdSense, FB Exchange, Social Media, and RockYou (and by combining 2 units on a page is making $1.00 CPM)
saintseiya is making $0.125 CPM with Lookery ($0.25 with 2 ads above the fold)
markdoub is seeing $0.10 CPM with Cubics, down from $0.43
ersingencturk is seeing $0.04 CPM with AdSense

We opined that it was hard to believe Facebook was worth $15bn on a $1 CPM, its even harder on this evidence.

Posted by Alan Patrick in Social Networks at 10:26 | Comments (2) | Trackbacks (0) | Top Exits (0)

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these are the starting point; rock bottom.

how many of these apps effectively leverage the social data/platform for relevance?

what's facebook's current and future number of impressions?

how do these CPMs (reported by app developers) compare to facebook's own?

$30 certainly seems like a pipe dream, but allow for a certain amount of CPM growth due to social targeting, a transaction/retail platform making CPT/referrals/conversion much easier to achieve and measure, the average ageaing of the facebook user, and multiply that up by the vast pageviews (and other engagement metrics, including the great share of 'voice' you can achieve on a site which people return to so frequently vs. other websites), and you can get to some pretty high valuations. I don't think anybody argues $15bn is on target though, so that's a bit of a straw man!

#1 phil bradley (Homepage) on 2008-04-28 12:10 (Reply)

Phil, you may be right - but even so I found that at $1CPM the $15bn was quite a stretch!

But you may be wrong too, for the following reasons:

(i) Impressions tail off with time -see my piece on that here:

http://www.broadstuff.com/archives/750-The-Rollercoaster-Dynamics-of-Social-Net-Usage-Traffic-Crash.html

(ii)The other killer is "unsold inventory" which brings down mean CPM - the online Ad revenue available is a far more fixed pie than Facebook's growing user base

#2 alan p on 2008-04-28 12:47 (Reply)

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