January 5th, 2007
Chris Anderson highlights the tiny direct cash return that Guy Kawasaki earned on his first year of blogging: $3,350 at a CPM of $1.39. That’s a pitiful CPM by mass media standards — and it’s totally wrong. The way media has traditionally worked, the more “pure” the audience is, the more efficient it is for advertisers to reach that audience, and thus the more they should be willing to pay — that’s the whole rationale for niche media. If you have a product or service targeted at the entrepreneurial community, Guy’s 30,000 readers should be pure gold.
Sites like Forbes.com and BusinessWeek.com can get $100+ CPMs for vaguely defined “business executives.” Why shouldn’t Guy be able to get a $100 CPM from the right advertisers? I’ve heard Rafat Ali say that he won’t take any mainstream consumer advertising on PaidContent — that’s probably because he’s aiming at the high CPMs that his pure niche audience should command, and he doesn’t want to dilute that with low CPM “mass” advertising.
I’m sure the folks at Federated Media, Feedburner Ad Network, and a few others have their sites set squarely on this problem. The reality is that, despite the efficiencies that Google has brought, the online ad market is still rife with imbalances and inefficiencies, which means there’s a significant opportunity for anyone who can correct them.
Chris has a great line buried at the end of his post — he calls the web ad economy a “land of skim milk and honey flavoring.” Indeed.