Gina Bianchini, the CEO and cofounder of Ning, has a lot to say about social networks created on Ning, vs. those created the big boys -- Facebook and MySpace. At her EmTech '08 pitch, she told the crowd that starting a network on Ning is like having a party at your own house, while trying to do the same at Facebook or MySpace is like holding the party at a stadium. Bianchini also needled Ning's two competitors on advertising revenue. On large social networks like MySpace, she said "effective CPMs" are between 7 and 11 cents. On Ning's topic-focused networks, they can be much higher, she claimed. Bianchini used the example of DIY Drones, in which the site operator -- Wired Editor-In-Chief Chris Anderson -- runs his own ads, and is supposedly getting $3 CPMS. "Ning actually sees effective CPMs that are three or four times the one-size-fits-all social networks," she stated.
That may sound good, but there are a few potential hitches in the CPM comparisons. First, DIY Drones -- a site which talks about building and using model airplanes -- is an exception. Its CPM level is actually about 30 times the level Bianchini estimates is typical for larger networks, not the 3x to 4x level that she says is typical for Ning. Second, while the big boys get millions of page views per day, niche sites like DIY Drones often measure their "Ms" in the single digits. At a $3 advertising CPM, 10,000 views in a month would translate to $30. At 30 cent CPMs, the same level of traffic wouldn't generate enough cash to buy a vanilla latte at Starbucks.
Lastly, generating revenue from a Ning social network entails purchasing the premium "control the ads" service from Ning for about $20 per month. A custom domain name means paying an additional $5/month to Ning, plus the costs of reserving a domain through an external registrar. The total cost: About $250-$300 per year. In other words, high CPMs are required -- or stadium-sized crowds -- to turn a profit.
Photo: Ning.com
More news, commentary, and predictions from The Industry Standard:
- EmTech '08: Khosla on investing: The technology must scale
- Analysis: Facebook makes millions from the sale of virtual goods, but can it rival advertising?
- Analysis: Facebook vs. MySpace: The battle for global social network dominance
- Analysis: 10 reasons that start-ups 100% absolutely should outsource (almost) everything
- Special Feature: Where are they now? The Industry Standard tracks down 10 dot-coms from the Web bubble of the late 1990s
Post new comment