Gary Sheynkman dot com

What makes the web great is that it is measurable. Marketing on the web is very effective (when done right) because you can gauge how effective your targeting is.

I would like to talk about a metric that the typical model of “get a ton-o-users then monetize” often overlooks: revenue per user. As your number of users grows, the revenue per user drops drastically.

Why does this happen? 2 reasons:

1. Infrastructure is not free. Storage and most importantly bandwidth, although dropping in costs, are fat bills that you have to factor in. These are so large, in fact, that companies like Facebook have to invest in creating new compression and storage technologies (like Haystack, for example) to cope with the large volumes of data.
2. More importantly, a bigger body of users is much harder to target. Once you step outside of the realm of interconnected communities, you are screwed. You might target males between the ages of 23 and 34 who live in Chicago and love Electronic Music, but you are not guaranteeing that they interact with each other or interact communally with your brand.

Read on to see what sites get the aforementioned issues.

So who gets this? Forums. Yes those weird places where people talk and not gawk at pictures of drunk college girls. Prime examples are enthusiast auto forums. Teamspeed.com, for example, has an affluent base that talks “cars, toys, and etc”. They hold meet ups and have a general sense of community that, for the most part, polices itself. This is an advertiser’s wet dream. If I am a premium wheel boutique, I can directly engage a community that is my target market. If I contribute expertise to the forums and sponsor the community, I am all but guaranteed that I am on the top of the list when an owner of an luxury car wants to buy new wheels.

Who else gets this? Local ethnic community sites. Take a look at ChicagoVue.com. This is a site for the Russian speaking Chicago young adult population. I can tell you for a fact that there are no Russian speakers in Chicago who have NOT heard of it. The advantage is simple. The market size is easy to manage. The community members know each other. Local businesses would much rather shell out online advertising dollars if they are guaranteed that their specific market is reached. Local dealerships, stores, real-estate agents, and others are prominent advertisers. ChicagoVue takes the concept further by being a promo company that ignites nightlife around the community. A profitable social networking site where people upload pictures and share their lives with friends?! Get outta here!

This bring me to Ning. Ning gets this phenomenon and allows granular compartmentalization of interest groups. This is the future of the internet. Not Ning per se, but the ability to create meaningful online experiences around communities as opposed to self generated networks.

Who will step up to the plate?

Agree? Disagree? Love to post comments? Feel free!!