AdSensibility

While the ad-based revenue model represents just one of the social software paradigms we've seen so far, Doug is right to point out that it's a powerful and important one.  Some numbers may shed light on just how powerful it's set to become.

Remember when I cited Facebook VP of Corporate Development Matt Cohler's estimation that his site served 3 billion monthly page views?  That was from May, 2004.  In an article released yesterday (sorry, no link, but citation at the end of this paragraph), Cohler predicts that once the Fall semester begins that number will have more than doubled to *seven billion* monthly impressions.  They've attracted group sponsors such as MasterCard, Apple, Victoria's Secret and Electronic Arts, not to mention all manner of banner and text ads.  (Shankar Gupta, Online Media Daily, August 15, 2005)

But there's more, folks -- last month, Nielsen/Netratings' AdRelevance system measured its fourth monthly increase in total online ad display impressions.  That's 102.9 billion in July, up from 97.1 billion in June, 93.1 billion in May and 91.4 billion in April.  MySpace emerges from this measurement even more impressively, appearing responsible for 10.8% of July impressions (up from 7.9% in June and 6.3% in May).  (These numbers are from Mediapost)

By my calculation, that works out as follows (sorry, couldn't find MySpace share numbers for April):

                                       

	Total	MySpace Share	MySpace Net
July	102,900,000,000	10.8%	11,113,200,000
June	97,100,000,000	7.9%	7,670,900,000
May	93,100,000,000	6.3%	5,865,300,000
April	91,400,000,000	-	-

...in other words, upwards of 11 billion ad impressions for MySpace last month.  Notably, Mediapost hypothesizes that "MySpace's popularity may have come at the expense of of Yahoo! Mail and MSN Hotmail, which accounted for 7.6% and 6.9% of online impressions, respectively, last month."

I suspect it's a bad idea to speculate blindly about how much individual advertisers are paying in this most wild-western of emerging sectors, but chew on this:  Facebook charges up to $7 CPM (cost per thousand clicks) for banner ads, and as much as $50 for day-long text ads at some schools.  I'm going to keep searching for pricing information with regards to sponsored-group pricing on thefacebook, but here's an interesting (and surprising) note from thefacebook's FAQ about what group-sponsors are not getting:  while it specifies that sponsored-groups are are "paid promotions by an outside company [which] controls the look and feel of the group," it also clarifies that sponsors don't "have access to members' personal information or profiles."

While it's possible for users to distinguish between groups created by sponsors and other users, it's clear that thefacebook is opting to market eyeballs rather than its deeply-valuale profile data.  And that should simultaneously be considered less-creepy from users' perspective and encouraging for companies such as Google and Yahoo that are working to grab the advertising high-ground.