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On Traffic, Money, And Advertising

Written by Mike Rundle on August 24, 2006

I was talking with my friend Pat McCarthy from Right Media the other day about online advertising, and one of the things we chatted about was that one of the best-known “Web 2.0” companies out there, Digg, is having trouble selling ads. About 30 minutes after I got done talking to Pat, I went to Digg.com and for the first time in my entire life, I saw a banner ad at the top that wasn’t a Google ad. Gasp! They sold one!

According to their advertising profile on Federated Media’s website, they have (approximately) 5M uniques a month, which is an extrapolated number that corresponds to about 15-20M pageviews per month. I don’t know how old those numbers are, but let’s work with them for a second. Their rates for the top banner are $16CPM, or cost per thousand impressions, so to launch a campaign for just one day on Digg.com it would cost about $10,600. One week is $74,000, one month is $318,000. I think the reason that few companies advertise on Digg is that the companies who can actually afford to advertise there would rather advertise on Yahoo!, CNet, ZDNet, NYTimes, LATImes, etc. The only companies that can afford to run ads on Digg are those with gigantic advertising budgets, and the companies with gigantic advertising budgets go for more mainstream sites that have a more proven return on investment.

So if the poster child for “Web 2.0” has trouble selling advertising, and “Web 2.0” is all about giving services away for free and selling ads (tongue in cheek), what hope is there for the rest of us?

Seth Godin’s Alexaholic List
Marketing genius Seth Godin recently hooked up with traffic rank site Alexaholic to produce his Web 2.0 Traffic Watch List, which is ~1000 companies and websites all ranked according to their Alexa ranking, a good indication of their total amount of traffic. Alexa rank is not a perfect science because only those with Alexa software installed can impact the data, but it does provide a real-time look at traffic trends and is useful for comparison research.

On the gigantic list of “Web 2.0” companies, little old 9rules ranked #131 and beat out notable companies like Rollyo, Prosper, Riya, Zimbra, Consumating, and even Microsoft’s Start.com. Although we don’t get much love from the West coast, we have been gaining traffic rapidly this summer which is always nice to see:

Alexa 9rules

b5media, Leading The Pack?
We don’t really put ourselves in the blog network rat race anymore, but our friends at b5media have recently begun publishing their aggregate network traffic numbers at the tune of 20M pageviews per month, a figure that definitely needs to be analyzed.

To give some perspective, 20M pageviews per month is more than the total pageviews received by TechCrunch (3M), GigaOM (~750k-1M), Boing Boing (~9M), and Newsvine (~800k-1M) combined, with a few million pageviews to spare.

B5media has about 150 weblogs across various content channels, so if you do some extrapolated math, you’ll find that (on average) every one of their weblogs must receive 133k pageviews per month equaling about 4,400 pageviews per day. Four thousand pageviews per day for every single blog is an awful lot, especially considering a lot of their blogs go for the niche audiences like Gryffindor Gazette or Flu Patrol, so either a ton of their weblogs get even traffic or they have a few homerun blogs that get the bulk of their 20M pageviews per month. I think the latter scenario is more plausible, so let’s find some of these homeruns.

Blog Network List shows the Technorati rank of all their blogs, so if we’re going with the “a few homeruns” theory then some of their sites need to have some pretty high Technorati juice in order to pull down enough pageviews for their 20M per month. After checking out the list they only have 10 blogs that crack the Technorati 10,000, but 3 out of those 10 include ProBlogger, Ensight.org, and DuncanRiley.com, which are the three sites owned by the founders. Out of the 10 in the Technorati 10,000 that aren’t owned by the founders (or aren’t their company site b5media.com) we’re left with The Gadget Blog, Successful Blog, Genetics and Health, Emerging Earth, eBeautyDaily, and Cellphone9 as their top blogs in the entire network.

Unfortunately, Technorati rank doesn’t mean much when you’re talking pure traffic, so for a comparison we’ll have to move to Alexa. As a baseline, I’m going to compare all these top b5media blogs to my lowly BusinessLogs.com site which only receives 1,000-1,200 pageviews per day. Here’s BusinessLogs vs. the first 4 and the final 2. As you can see, the only blog that comes close to the 1k/day Business Logs traffic is Successful-Blog, but that makes sense because its Technorati rank is currently better than Business Logs. What is odd to me is that out of the 150 blogs b5media runs, the ones at the very top (that should be responsible for the bulk of their 20M pageview per month traffic) can’t even breach the Business Logs Alexa results and I only get 1k pageviews per day. Even if you add in the founder’s blogs and give them healthy traffic estimates (let’s say Ensight, ProBlogger, and DuncanRiley all get 20k pageviews per day) that only tacks on 1.8M pageviews per month to their bottom line. 20M pageviews for the entire network minus a 1.8M pageview estimate for the founder’s blogs, minus a healthy 1M pageview estimate for b5media.com itself means that the remaining b5media blogs run by their editors receive ~17.2M pageviews per month even though out of all those remaining blogs, only 6 make it into the Technorati 10,000. Yes the data at Blog Network List might be out of date, and yes Alexa stats aren’t a perfectly reliable source, but these small variances seem underscored by the large mathematical gaps I’ve just presented. Of course I’m probably an idiot and am missing something big here, so Jeremy, please show me the light by linking to some screenshots!

Social Networking Gets You The Traffic
The problem with “Web 2.0” (well, one of many problems) is that many companies are generating solutions and companies around those solutions, even though the problem they’re solving hasn’t been discovered yet. Too many startups in the Valley are concentrating on getting the core tech audience but forget about the 99% of the world who don’t care about Ajax or your API. The startups doing the best happen to be the social networks, namely, MySpace and Facebook, because they’re appealing to the majority audience instead of just the tech-savvy few. You don’t need to know about RSS or Ruby on Rails to appreciate what MySpace and Facebook are doing, and that’s what brings the masses to their front doorstep.

These two social networks have just inked deals with Google and Microsoft respectively that will give these two advertising giants the exclusive right to sell advertising on two of the largest social network sites around. What’s interesting about this is that instead of having Digg’s problem of not being able to sell ads, these two social networks were negotiating with major companies to sell all their ads at once! Why the complete polar reversal? Social networks attract people of all tech skill levels, from all aspects of the socioeconomic ladder, and compared to Digg they have an extremely mainstream audience. What gigantic blogs do the best? The ones that attract a mainstream audience, like pop culture blogs, gossip blogs, etc. The key to growing out of your niche is to provide value to an audience outside of your core, and the companies/websites that can do that always seem to be the most successful.