menéame - Part 2

As I had mentioned in my last post, menéame was doing very well in terms of traffice, however it was facing the challenge that the traffic did not necessarily turn into any substantial financial returns.

menéame is reliant on advertising revenue as its sole revenue stream. Its advertising was handled by an agency for most of the campaigns that relied on CPM (cost per 1000 impressions) for bringing revenues and then they had Google adwords to fill up the empty advertising space and those were CPC (cost per click) based.

Looking back at the behavioural segmentation of menéame users would help shed some light onto why is that menéame has not been making as much money as it is supposed to. The users can be classified within a spectrum, passive users being on one end and then the ultra active on the other. Roughly, the most active menéame users whom are are always uploading content and participating in voting and commenting would only account for around 1% of the total user base; 9% would be the users who vote and comment but do not necessarily upload content themselves; which then leaves 90% of the user bases as generally the more passive type that would probably just visit to read a few things and then leave without making any impact.

What does this mean??

Basically around 90% of the people whom visit menéame are not the active "clicky" type, making CPC advertising not very effective.

So why are they not using more CPM advertising instead?

Well, basically they are not attracting enough of it.

Why?

There are a few different speculations on the reasons behind that...(as per our in-class discussion with Enrique Dans):

• Are the users of menéame an attractive market for CPM advertisers?
• Advertisers mind putting their advertising next to some of the content which is not regarded as of acceptable quality (trivia) - which links to that menéame is not able to really exercise any control on the type of content it has
• A more interesting reason would be that advertisers do not like the name, menéame, due to the secual connotations it has...
• The lack fo demographic data on the users leads to an incomplete understand of the users and therefore making targeting less effective and less attractive
  

So basically, although menéame is proving to be quite a successful virtual space in terms of user base and traffic bokerage, it is still quite flimsy on revenues...

Those were just some of the basic facts...I am currently thinking out to make some suggestions on the way forward for menéame...However...do please offer any thoughts, it would be highly appreciated...

So stay tuned for more on menéame!