June 23, 2008

Monday's links

Some interesting articles from last week:

Paid Content: LinkedIn Raised Its Big Round; $53 Million From Bain and Others; $1 Billion Valuation. "This brings the total money raised by the company to over $80 million and it has said it would have revenue of $100 million for 2008. LinkedIn, which says it is already profitable, will use the investment to make acquisitions and expand its overseas operations. The NYT story also breaks down in more details the revenue sources for the company: LinkedIn will get only a quarter of its projected $100 million in revenue this year from ads; part of it is also the premium subscription, which let users directly contact any other user; and then the third source of revenue is recruitment tools that companies can use to find passive job seekers." It is not only about ads...

Watchmojo: Traffic Does Not Correlate to Revenues. "Revenues grow over time as you become better versed with what clients look for and penetrate advertisers and marketers decision making process. Month over month, revenues grew even if traffic began to taper off." Traffic is business-to-consumer, advertising sales is business-to-business, which explains to some extent why they don't correlate perfectly. Longer term losing traffic will affect your revenues negatively, though.

Jason Calacanis: Finding your startup's "moment". ""The moment" is the exact time when an individual, after engaging your product, "gets it." By "gets it" I mean they understand your product's value proposition at such a deep level that they: 1. get excited, 2. have an epiphany of sorts, 3. can explain the value of your product to others easily"

Paid Content: Display’s Big Spender: University Of Phoenix; Category Continues To Wait For Big Brands. "When it comes to big spenders of online display ads, forget Procter & Gamble or General Motors: the biggest buyer is the University of Phoenix, a for-profit institution which devotes an average of $20 million monthly to online ads, mostly for display. The numbers, from TNS Media Intelligence and cited by WaPo, highlight the glacial pace of big brands shifting their ad dollars to display." Online advertising really is three different types of advertising: search, performance-driven display advertising, and branding-oriented display advertising. While there are several similarities between the three types, it is in understanding the differences and how each fits different sites one can create a profitable business.


Jon Forster said...

A fine set of links this Monday Henrik, thanks for that!

I really enjoyed the Calacanis one, have you had your perfect moment at Stardoll or is that a trade secret? :)

The PaidContent post about the huge volumes being driven by performance display advertising online is interesting too, often feels like a giant game of tag being played with cookies to me. I do like what MSFT/AQNT are building with regards to the whole engagement mapping thing though and think that could be the germ of the potential to change the game massively.

There are loads of great ways brands could be reaching consumers online today that would be more effective than the crazy amounts of wastage offline, but traffic not equating to revenues is just as true at an industry level as a site level.

Good stuff though, got my brain muscle working this afternoon!


Henrik Torstensson said...

My pleasure. =)

On the perfect moment, many of our members have had it. Otherwise they wouldn't come back and play, tell their friends etc.

There is a lot to be done wrt display advertising, especially figuring out what quality an individual (the marginal) ad impression is.