SOCIAL NOTWORKING


As a managing director for Morgan Stanley, Mary Meeker is the firm's global lead for the technology research unit. In 1995, she co-authored an industry report "The Internet Report" which would become a landmark during the internet boom era.

In her most recent presentation at the Web 2.0 Summit in San Francisco, "Ten Questions Internet Execs Should Ask & Answer" , you can find the chart that follows. It represents share of online display units along with corresponding CPM rates.


Click on the graph to enlarge

The report should be unnerving for the likes of Social Networks and especially Facebook. At the same Summit, Mark Zuckerberg brushed off advertising as "it's not necessarily about advertising".

Insanity?

It certainly isn't about advertising when faced with a dismal display rate. It also illustrates how weak the site is when it comes to ROI. With the exception of a few mega-efforts by major marketers (supported by even larger TV budgets), Facebook falls flat on its own face.

And it is becoming a potential detriment to sustaining business models supported by advertising.
Posted by Paul Benjou Permalink
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2 comments:

Joel Gilgoff said...

I don't see how you can determine effectiveness from the chart that you have displayed. The low CPM times a very high volume still adds up to a large revenue stream.

If it was not an effective source of business - there would be few if any advertisers.

12:02 PM
Paul Benjou said...

Joel..

As in any business, you get what you pay for. In Facebook's world, you get much less. In may cases the buys are automated through media trading desks. If marketers were smart enough they would either pay lots less or make better leveraged returns elsewhere.
Facebook is simply not a very good ad channel.

12:42 PM

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