Alex Schultz: APIs

Part 3 Median vs Mean: Cume vs GRP in offline media and what it means for internet marketing

One thing has been true for as long as marketing has been around: It doesn’t matter how good your ad is if no one sees it.

Dave Goldberg (CEO Surveymonkey) gave a great talk at an event I was at recently and shared an anecdote about MTV’s audience on 30min shows vs 5min music videos that is worth repeating and set me thinking a lot more about reach and frequency in internet marketing.

GRPs vs Cumulative Audience Rating

In television measuring how many people see your ad is done using set top boxes and often a combination of “gross rating points” (crudely: what % of the possible TV audience sees a given show, detailed description linked below) and cumulative audience rating (similar but what % watched a show in 15minute segments of that show).

In the 1980s MTV did great on GRPs because people would tune in to catch a 5minute video. The problem for MTV came when cumulative audience became a big measure in the 1990s, people just weren’t sticking around for 15minutes. If you followed a Stone Roses track with Madonna the two audiences were not the same and so the stone roses people switched off and by the time you reached the break (where the ads which funded the show were) MTVs audience was a fraction of it’s GRPs because the cumulative audience (who watched for a full 15minutes up to the break) was small since you just don’t like every video in the hot 40.

The following slide (from this presentation: http://www.scribd.com/doc/3046688/ANALYSIS-Audience-Cross-Rating) shows even today how rapidly the audience figures drop off with time on a given channel (MTV, MTV2 and CBS).

With 30minute shows like Beavis and Butthead MTV managed to get an audience that stuck around through the commercial break giving the ads greater exposure and making marketers really happy. Not only that but their audience seemed to love them too and their total GRPs went up too which led in many ways to the Hills etc… etc… and a lot more revenue for MTV.

MTV optimized to drive up their median user by changing their show format. They did not optimize to drive up their mean user by making their 5minute videos so perfect that the folks watching 1hr a day would watch 2hrs. This was a great decision.

So how does this apply to Internet marketing

In display media for internet marketing people buy impressions but this is really nuanced. You should not be just buying “impressions” you should be focusing hard on what the reach of those impression are and ensure whoever you buy from gives you a frequency cap. Below is the distribution of visits on my paper airplanes site in the last 30days.

As you can see if you want to hit 160k people with my site you can BUT after the first impression you will only be reaching 90k people and by the 4th impression you will only be reaching 54k people. I could make total delivery of impressions huge while still only giving you a small reach by not giving you the first 4 impressions. Frequency caps matter a lot.

Conclusions

In order to maximize the chance of your ad doing well you have to maximize it’s audience.

Understanding the data you are using to determine reach is therefore very very important.

Anyone who can offer great reach and high frequency will make a killing in advertising sales and THAT is a challenge of optimizing for the median user (in paper airplanes case the person who see 2 page views) and not the mean (who in paper airplanes sees 6 page views).

Planned posts:

• The key to understanding your website
• Diminishing return on user value against page views per user
• Cume vs GRP in offline media and what it means for internet marketing
• How to optimize for the median

I hope you stay with me and read them all :)

References:

Cumulative Audience Rating: http://www.answers.com/topic/cumulative-audience-rating

Cumulative Audience: http://www.answers.com/topic/cumulative-audience

Gross Rating Point: http://www.answers.com/topic/gross-rating-point

Presentation on MTV time on channel: http://www.scribd.com/doc/3046688/ANALYSIS-Audience-Cross-Rating

Earthquakes on Facebook

Had to post this… so cool to see so many people updating facebook about the earthquake so fast

It’s actually pretty fun to search for “earthquake facebook” and see what people are thinking about regarding Facebook and the earthquake updates!

Google: we’ll serve scam ads but won’t put our logo on them

Here are two ads served consecutively on my site by Google adsense both are graphical ads. Google branding is very clear on the second ad but not the first.

 

The domain migration may be working

So a few days I talked about the fall and then rise again of my online tattoo design websites: Keeping on rising

As you can see the recovery seems to be getting together. Lots of work still to do.

All the traffic seems to be coming from Google image search so I am still not getting back the main keyword rankings. We will see how that happens over time:

Cocktail season is upon us – thanksgiving and Halloween traffic comparisons for UK and US cocktails

This Friday I saw a nice spike in my Friday traffic to cocktailmaking.co.uk, the highest since Halloween and beyond that best since the summer cocktail period. I am excited the holiday cocktail season has begun.

I have included the traffic graph for my US traffic over the last two months below. One really fascinating thing for me is that Halloween is now a really big cocktail period and the fun co-incides with the weekend due to the holiday. You can also see that Thanksgiving is great for cocktails, there is a really clear midweek spike for thanksgiving which doesn’t fit the normal periodicity of my traffic (saturday and sunday high, mid-week low).

When you compare that to the UK traffic below you can clearly see no double spike around thanksgiving but everything else looking really similar (halloween is a little less pronounced)

I love looking at different countries and seeing how they vary and more importantly how similar they are. Much of my career I have talked to people who expound the differences between markets but so often with internet marketing countries are more similar than different.

Revenue drivers (or not) in last two years

If you have a website that gets 100k’s of visitors you can make a decent supplementary income from the web. Depending on the topic area you can make a lot. In some niches that can make you a lot more than a decent supplementary income but my sites aren’t in that category (yet :) ). That being said I am lucky enough to have enough revenue and traffic to have fun data to share from time to time. So here are some fascinating points. 4 things have driven my revenue over the last 2 years:

1. Traffic (specifically unique visitors not page views)
2. CPMs (revenue per visitor in effect, I may write another series of posts about this)
3. The bubble in video revenue around revver’s funding and the subsequent collapse in that bubble
4. The economy collapsing and now the start of the recovery

The below graph shows the collapse in revenue per visitor after Sep 07 when revver CPMs started to tank

The below graph shows year on year revenue growth which you can see took an initial hit post revver changes but tanked even harder in the middle of 08. I firmly believe advertising revenue for smaller sites is a great indicatory of economic trajectory (around the last recession my cpms tanked and then the news started talking of recession the same happened here).

Overall visitors have grown through this whole period very nicely. Page views have not since I have optimized for things like video views which users seem to love but means they view less pages.

And revenue has now recovered very nicely so that November was almost equal to the video bubble peak with revver paying out huge amounts for video views. In general I think this emphasizes that your view should always be on the long term… build traffic, build audience, make your sites better and revenue will follow over a multi-year period.

So I am focusing on integrating social more and more right now into my sites and adding more video. Looking at the multi-year web trend I believe that’s where the future is so better get to it sooner rather than later. The present will take care of itself.

Social gaming taking off everywhere

http://ryanspoon.com/blog/2009/11/24/650000000-downloads-via-playstation-store-facebook-connect-goes-live/

Ryan has a good post about how huge playstation is with 650M downloads of data before Facebook connect launches.

http://venturebeat.com/2009/11/23/zynga-crosses-100-million-users-and-expands-beyond-facebook-games/

The above is a note about Zynga flying through 100MM users and if you take a look at the Zynga jobs page you can see how mainstream they are becoming

http://www.guardian.co.uk/technology/2009/nov/09/playfish-ea

There were of course a lot of articles about the sale of playfish to ea which makes me for one really excited about the idea of getting all those great ea games (e.g. Risk http://hasbro.ea.com/game.action?game=risk) onto my favorite social networks.

http://www.talkxbox.com/article3495.html#

And finally xbox announced 2MM users connecting via Facebook already in just days.

People want to play games with their friends (I for one love farmville and would really like to see Risk on the Facebook platform and would pay to play).

The Kindle will Crush it in the UK

 

As you can see above one thing is completely lacking from the Amazon.co.uk homepage that dominates the US homepage. The Kindle.

The kindle will launch in the UK soon and when I does I believe it will be even more successful than in the US. The big reason why is public transport. Whereas in LA and the Bay area and even to some extent the east coast (although less so) people love to commute by car in the UK everyone uses public transport. For example in London (where 1 in 5 britains live) every train is massively crowded. The whole newspaper format was changed after 100years to make them easy to read on the train. I was reading my Kindle on the train this morning and noticed lots of people staring (at it sadly not me :) ). They were all struggling with newspapers and big books on a fast moving, rocking train. I had one hand on the rail and was controlling the kindle easily with the other hand and had lot’s of books at hand (currently reading the tyranny of email).

Anyway just a general thought but look for kindle sales and associated book sales to go bananas (technical term :) ) when the kindle launches in the uk.

The Browser Landscape 2006-2009

The above graph shows market share by browser type from 2006 to 2009 for my cocktail making site. I reviewed the traffic to both cocktail making and paper airplanes which have very different traffic types and global compositions but together make 300k visits a month now and millions of page views so have a relatively large sample. As such both sites have a non tech audience which I think makes them good subjects for reviewing this data and it is very similar across both sites.

Bottom lines:

Chrome (% below is surging)

Safari is still growing strong (most likely driven by mac market share which I will share data for another time):

Firefox growth seems to have slowed significantly (at least in terms of market share they are capturing):

and internet explorer is in continual market share decline:

All of this is purely data from my websites but it is a pretty large sample set and I think what is very interesting is that after a long time of being on the sidelines Google and Apple are leveraging their dominant market share in their particular markets to be really competitive in the browser market. I am personally not convinced this is market share leakage driven by competitive products rather than by different companies leveraging their different dominant market positions (in different markets) to succeed in this one and again I am not convinced there is true innovation happening in the browser business… it feels to me like getting your browser installed is just a ploy to get more searches on your service (not that there is anything wrong with that).

dimensional reasoning, fermi problems

The above image has been burned into my brain for 7 years now. Not for the obvious reason, I am not horrified by the bomb or awed by the power or whatever (well maybe a little bit). This image and the story behind it taught me a great lesson about physics and business while I was studying for my undergrad at the Cavendish laboratory in Cambridge.

The lesson was that you can get to within an order of magnitude of calculating the power of a nuclear bomb using that picture and a bit of common sense. The full story can be seen here: http://www.tableausoftware.com/blog/visual-analysis-zeroth-kind-geoffrey-taylor-and-bomb and I highly recommend you read it. Spending a short amount of time and really thinking through a well defined problem should give you a good idea of the answer. If the order of magnitude of the result of a test isn’t interesting to you based on that reasoning, don’t do it. Move on to the next thing. Focus on the high impact. Your time on earth is short, don’t waste it doing trivial things.

The fermi problems are also an interesting space which I consider really similar to dimensional reasoning which is just using common sense to determine a value. My favorite is “how many blades of grass are there in a front yard”. The idea being you realize the yard is something like 10m by 10m and there are something like 20 blades of grass in a cm squared so you have 10^6 cm squared and hence 20million blades of grass in that lawn give or take (feel free to correct me if I got this one wrong). The idea is that it gives you answers that are correct to within an order of magnitude. You can read more about fermi problems at the links below.

http://infoproc.blogspot.com/2009/05/fermi-problems.html

http://radar.oreilly.com/2009/09/there-are-over-a-million-people-actively-using-facebook-right-now.html

http://en.wikipedia.org/wiki/Fermi_problem

I am a huge fan of doing this common sense checking before you do projects or to make sure that a number you are quoting is right. Really great reminder from o’reilly radar (an awesome blog) to think about this stuff.