October 20, 2009

Pricing of online ads and Facebook game development

Jerry Neumann on online advertising pricing: Media has always been an attention economy, Two (More) Hypotheses on Low Online CPMs and Details, details. "The online CPM is the above number divided by impressions per hour. Note that the online spend/hour is pretty steady from 2002 to 2008, between $58 and $66 per thousand hours. The decline in online CPMs can't be attributed to this, unless there was a large increase in ads/hour. This may be so (I can think of arguments both ways, but have no idea what the facts are) but who cares, really? If I spend an hour on the NYT site and they show me 30 ads at a $2 CPM or 6 ads at a $10 CPM, they make the same amount of money: I assume they show the number of ads that maximizes their revenue."

VentureBeat on Zynga's making of Cafe World. "The team included 25 producers, product managers, game designers, artists and programmers - all from a variety of backgrounds, not just video games. Sehgal himself considered himself to be a "web guy, not a game guy." ... "To keep the game going, Zynga is releasing new features and assets for the game several times a week. Sehgal told the team that 20 percent of the effort was building the game and 80 percent is operating the game as an ongoing service.""

On price: What is it worth? and What's the relationship between cost and price?

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