MySpace: Unstoppable Force or Unnecessary Click Factory?

So I just read the big article about MySpace in today’s New York Times and it got me thinking a lot about growth, monetization, and user experience. People always talk so much about how many pages MySpace serves up and how that represents such dramatic growth.

After playing with the thing for a few weeks and writing a hugely ridiculous article on customizing it, one thing has really stuck out to me: there are a tremendous amount of extraneous page views being generated at that place. It’s a factory of unnecessary clicks. And so when one would view MySpace’s current page view trends on Alexa, one would see this:

Here’s a sobering thought: If the operators of MySpace cleaned up the site and followed modern interface and web application principles tomorrow, here’s what the graph would look like:

(Editor’s Note: I originally fat-fingered the first graph above when uploading it and used the Reach graph by mistake. Fixed. Both graphs show the exact same curve, however. Thanks to Owen Thomas of Business 2.0 for the heads-up.)

That’s right. I hold that at least 2/3rds of page views would disappear. Here’s what I mean. This would be the flow in a, say, Google-engineered network experience:

1. Click over to “GoogSpace”, or whatever we want to call it. (+1 page view)
2. Click through to read and reply to all mail (0)
3. Visit a few friends’ pages (+3)
4. Edit my profile page (+1)

That’s about 5 registered page views. The rest of the interaction comes from XML/HTTP requests.

Here’s the same sequence on MySpace:

1. Click over to MySpace. (+1 page view)
2. Log in, because MySpace doesn’t remember logins very well. (+2)
3. Click through to read and reply to all mail… about three per mail. (+21)
4. Visit a few friends’ pages. (+3)
5. Reload a few pages because of server errors. (+3)
5. Edit my profile page. (+10)

That’s about 40 registered page views… and it’s not an atypical pattern at all, from what I’ve found. Many people have also mentioned that web-based IM generates a ton of clicks for them as well.

So what’s my point? Well, first and foremost, the “cost” of running a web site that maximizes interaction and yet sacrifices page views in the name of user experience can be staggeringly high. If any layperson or out-of-touch analyst looked at the second graph above out of the blue, they’d think MySpace had run into something awful. And I only chopped the page views by 2/3rds. It could be a lot more.

Now, ordinarily you’d look at this as a very bad thing for MySpace. Essentially generating extremely “low quality” page views left and right. But the New York Times article said MySpace’s pages were selling for a paltry $.10 CPM. Ten cents! That means I could buy 5 million page views for $500 on the second-most popular site on the internet! As forensic expert and O.J. Simpson defense witness Henry Lee once said: “Something wrong here.”

In addition to the low CPM, MySpace ad inventory is apparently not selling out, which means they could perhaps deal with some page view shrinkage at this time. The problem, however, is that less page views does not mean automatically higher CPMs. It does when people are beating down your door and you’re oversold all over the place, but not when you’re lowering prices just to keep ads populated around the site.

So hypothetically, if MySpace went from 30 billion page views a month to 10 billion page views a month overnight due to some much needed site modernization, what would the consequences be? On the product side, it would be unquestionably positive. Better user experience equals much greater user happiness and stickiness. On the economic side though, it’s a little less clear.

There are three conditions a site can be in: undersold, sold out, or oversold.

Let’s take the undersold situation; the situation MySpace is currently in. According to the NYT article, they are doing about 30 billion page views per month and are not sold out. Let’s just say that hypothetically they are *close* to sold out and they have about two ads per page… so maybe 50 billion ad impressions per month. At a $.10 CPM, that’s $5 million. But we know that the average CPM on MySpace is probably higher and we know that they will take in about $200 million this year (or $16.6 million per month), so that’s about an average CPM of about $.33 (at this point, we’re in conjecture mode). So given our new inventory of only 20 billion page views a month, after user experience optimizations, that’s $6.6 million a month. But since there are so many less impressions available now, can they charge a bit more than $.33 CPM? Probably. Bump that up to a dollar and you’re already ahead of where you were, revenue-wise, before you optimized.

(Edit: I just re-read the article and 10 cents is not the bottom price but rather the average price, so if MySpace is bringing in $16.6 million a month, that means they are selling 166 billion ad impressions a month… which they don’t have. So let’s say they have 50 billion ad impressions to sell at $.10 CPM. That’s only $5 million. Either a ton of MySpace’s revenue is *not* coming from CPM ads (entirely possible), or I am seriously forgetting how to do math.)

Now, the scenario above is only true if you’re in the situation MySpace is in, unfortunately. Way more page views than you know what to do with and massively undersold from a price/quantity standpoint. Take any of their competitors, or really any company who is earning decent CPMs and doing ok on ad inventory, and you could almost never dream of eliminating a ton of your page views. This is a dilemma companies face every day when deciding if and when to replace precious but inefficient page refreshes with more user-friendly Ajax calls.

So where am I going with all of this? Well, I hold that MySpace is in a unique position right now because of the numbers they are putting up combined with the fact that they are now owned by an $18 billion company, and the absolute best thing they can do right now is reduce their inventory by reducing their page views. Or at least reduce them “per action” on the site and continue to grow their user base. The founders have already had their big liquidity event so there’s certainly no need to create artificial page views to make yourself look better to suitors anymore.

As for additional streams of revenue and monetizing MySpace further, I’d drop the hope that companies will purchase pages that users will want to “friend” and concentrate on more on turning each and every kid into a walking product endorser. In fact, if I wasn’t running Newsvine right now, that’s the business I’d be in.

I know everyone says MySpace is this unstoppable force that will always be as popular as it is right now, but if I’m them, I’m more paranoid than that. The only company I know of that can stay consistently a step and a half ahead of pop culture is Apple, and even *they* do it to a large extent with user experience.

If you believe Malcolm Gladwell’s principles from The Tipping Point, you believe that all it takes is the right group of 50 influential kids in New York City to start using another social networking service and the pendulum will begin to swing. That’s what people like Fred Krueger and Ted Leonsis think, and although I’m not sure whether or not they’ll be the ones to do it, I certainly believe in the fragility of it all.

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94 Responses:

  1. Nail says:

    Not sure if this is a right place… We have growing electronic newsletter mailing list, and I’m desperate to find decent, reasonably priced software or shareware for list management and distribution. We’ve been using Outlook and ACT and they’re not working well. I was found bulk email software for sending newsletter. Are there other good options to help save my sanity? Does anyone know of any good hosting company that can handle bulk email? We need to send newsletters to about 900 customers without the hassle of restrictions. Thanks!

  2. Danielle says:

    – These thoughts combined with reader comments express what has been driving me nuts about myspace.

    I only want to add, that I disagree that “kids” could care less about an efficient interface. The truth is, with how quick and streamlined things have gotten, the kids will be the first to abandon for something with better functionality and speed.

  3. Martin Koch says:

    One thing that needs to be remembered is that Myspace’s inefficiency is part of its appeal- Users are attracted to its upstart qualities despite the fact it is owned by an 18 billion dollar company- Many users are simply attracted to either its social aspects or its emense marketing ability- Where else could a band expose their Music to potentially 1 million people plus at a time within the space of a few weeks-

  4. Mike D. says:

    Martin: I don’t think the inefficiency has anything to do with it. “Social aspects” and “marketing ability” are not related to inefficiency. They are orthogonal.

  5. Chris says:

    One thing that really kills me about MySpace is that it seems people are just on there to show off how awesome they are, there is less networking because there is so much hostility about who is better than who and who did what.

    It just seems like a very badly designed, very agressive site.

  6. Carol says:

    I, for one, simply cannot believe Friendster was only mentioned twice in this discussion. MySpace is, as mentioned right above, “very badly designed and aggressive,” in comparison to Friendster’s earnest, earthy and homey feel. I get a sick feeling having a profile on MySpace. I wish my Friendster profile had as much meaning as it used to. MySpace just sucks.

  7. Tom says:

    Definitely interesting.

    I saw this kind of info compaaring myspace to blogger. From a marketing standpoint, one also needs to consider the demographics of the audience. With myspace, the web-stat numbers may be high, but the audience is mainly high school kids (I teach in a HS). High school kids work part time, if that, so they don’t have a lot of money to spend (yes, I know, some get stuff bought for them by their parents, but they don’t have full spending power and authority themselves). Whereas bloggers I think are the next segment up, the young adults, and adults – who have jobs and careers, more affluent hobbies and more individual purchasing power. So, from this angle, it is not just about numbers either.

  8. Kevin says:

    So bascially, it’s easy to manufacture hits…haha i like that!

  9. I lost the flow of the conversation about 15 comments in, so I’ll go off on my own tangent about MySpace.

    I contacted the folks over at MySpace with some ideas on how they could clean up the site and generate more revenue and eventually drop the ads, or at least a big part of them. Since they didn’t listen, or at least didn’t get back to me for my input, I’ve decided to launch my own version aimed at an entirely different demographic; parents.

    I’m posting this here in the hopes that the people that are discussing the issue of MySpace may be interested in getting involved with a “Smart” startup.

    BlueWEB Media, Inc is in the process of launching the SuperMomNetwork and then branding from that user base, SuperMomSpace and SuperDadSpace.

    Anyone interested in getting involved with this startup can contact me at bluewebmedia@gmail.com

  10. Hang on…$0.10 per view would be $5000 for 5 million page views :)

  11. or even $50,000 sorry big numbers scare me!

  12. Mike D. says:

    Tom: It’s not $.10 per view. It’s $.10 per thousand.

  13. Graham says:

    The draw of Myspace is how easy it is for a non-technical person to customize the hell out of their personal page. This is why the kids love it; because they know how to add relevent videos which appeal to them and their peers. I could pop over to my myspace profile and add a clip from the ‘Dave Chappelle Show’ in 5 minutes. Or a new song from my favorite band. Or I could get a layout with a gigantic animated faerie dancing in the background. Yeah, this stuff all sucks from a professional’s perspective, but the users love it.

    And I’ll agree with early comments that I have found many old friends on Myspace that apparently communicate solely thru that site for messaging, so I’m not sure how they’ll be able to break off and go to a competator.

  14. Tom says:

    i created myspace for the simple fact that people would make friends and have something to express themselves with. its not all my fault that people got mudered or raped ites not like i knew that was going to happin. its just a site to find friends even friends that you havent seen in years or maby you wanted to find family members

  15. Jon says:

    I enjoyed the article, some intresting thoughts and facts. Did the real Tom just leave a comment…… Wow !

  16. ziggy says:

    Can anyone explain how search works on myspace? When I search for my myspace domain name on there, a term also used in the title, it doesn’t come up. Searching for other terms on my page, it doesn’t come up either.

    Does it only search blogs on there?

    And have you noticed there’s no obvious way to make a blog post from your profile page? You have to view all blog entries then post a “new blog” not a make a new post.

    (As an aside, I don’t know anyone on myspace, just put up a page to try it, think it is the crappiest website I’ve ever seen, and can’t even figure out how to “interact” on there, though I have no real desire to find out. What are you supposed to do, hunt around and get yourself added to other people’s friend lists? Cheesy.)

  17. Nicki says:

    Yahoo!’s Chief of Insights Peter Daboll posted on our company’s blog (Yodel Anecdotal, yodel.yahoo.com) about the need for new measurement tools, given that new technologies like Ajax and Flash can’t be accurately counted in terms of page views. A whole lot of user engagement (and a better user experience) translates into essentially one page view. Not too many Yahoo! apples to MySpace’s oranges.

  18. KS says:

    I guess this is a patently n00b question…how do social networking sites like myspace et al host so many pages and that too with content that is so ‘heavy’? Isn’t it very expensive? What about sites that are just coming up and who don’t have a good enough revenue stream…how would they go about doing this in the most cost efficient way?

  19. JENNY says:

    HEYY U SEXYY BEAST IM TRYIN 2 C IF DIS WORKD I WANNA LEAVE A COMMENT ON MI OWN MYSPACE

  20. jill says:

    Well I now no how harmful my space is not only to children but to lonely 22 year old girls who think that they need compaionship. my granddaughter had a baby 4 months ago and the father is not in its life. She met this guy on my space saw him 4 times and decided to leave home with her child for him. They talked on the space for 2 weeks. This guy is an abuser and is on hard drugs he is a 9 grade drop out. If anything should happen to my grandchild My Space will have another law suite on their hands. Is there anyway this site can be closed down. To many children are being hurt and taken advantage of from this site.
    As for sexual preditors my granddaughter ought to know about that her father is a my space subscriber and he was just convicted of being a sexual preditor and he is still walking. He is still on my space and he is still talking to you children. He molested his own now he wants someone elses child

  21. PRINCESS JANAI says:

    i think this my space stuff should leave bacause it is making little kids want to go on it and it not for them and its giving to much info about people i want it SHUT DOWN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  22. reality says:

    princess, get a life, you imbecile – people give the info, not the site, and if little kids are on the internet unsupervised, that is the fault of the parents, not myspace, which should be the least of your worries.

  23. jonathan says:

    Haha, looking at things now, the Myspace Killer everyone mentioned a year ago looks like Facebook.

  24. mazzy (f) says:

    First, I’m relatively new to cyberspace, however I’m a pretty quick study &, whilst I’ll admit a lot of what you had to say went over my head, I get the point & totally agree.

    Having said though, I’m enjoying myspace, probably because I dont have too many friends (by choice)…

    The constant signing in is a bit annoying, (I just minimised this page to check my URL & lost myspace, hence, had to sign in yet again)…I too, have friends whos’ sites I dont even go near because they take forever to load. ..

    I also have a profile on Netlog (formerly known as Facebox) & I hate it with a vengence. It will not even allow me to reply to a message. Every time I get part way through, Microsoft pops up with a warning saying “sorry blah blah, we have to close blah blah blah..” then the whole thing shuts down.

    The Netlog team always reply to my “help” questions but their answer to this particular problem was to ask me “what browser am I using?”…like an idiot, I wrote back…their answer…”install Firefox”
    including a link to do same..thanks for nothing Netlog. Then again, TOM has not replied to me once concerning anything.

    So as far as Facebox taking over popularity I dont think so…it sux
    I also find myspace more private….Being new to all this I just followed the promts when installing Netlog & then, to my horror, discovered my email addies were public…Netlog would not allow me to remove them when I tried to take them out, so I had to put in FAKE ones just to shut the thing up.

    I’m sure by now ur thinking “what is this woman on about?”..never mind..hope u get a laugh at least. That’s assuming u actual got to the end.
    mazzy

  25. More on MySpace

    This is a great article posted by Mike Davidson:
    MySpace: Unstoppable Force or Unnecessary Click Factory?
    Need not say any more.

  26. MySpace not so good enough for ad space?

    The New York times has a story being bandied about this morning over the challenges MySpace is allegedly having sell advertising on their sites. Has anybody that’s wondering actually been to MySpace lately? That space is littered with ads. Someth…

  27. MySpace Expands To Fill The Hype Alloted

  28. Alex is web 2.0 enemy #1

    Over the past month, I’ve begun to spend more of my time on raising capital for Pluggd, and have learned how important Alexa is in the fund raising process. Here is a dirty little secret, on Sand Hill road, they

  29. myspace, revenue and experience design

    Mike Davidson, lead designer and CEO of Newsvine, writes a really smart post about the gratuitous clicks within the design of the MySpace interface. He argues that properly applied user experience design would increase the stickiness of the domain, but…

  30. How Does AJAX Web Design Effect Ad Revenue

    Mike Davidson of Mikeindustries.com and Netvibes.com

  31. […] text above is mine – and I think this is an important point. Page views can mean many things. As Mike Davidson’s excellent MySpace analysis has pointed out previously, MySpace is an extraordinarily inefficient (perhaps intentionally), […]

  32. […] has a great post taking this idea further and Mike Davidson wrote months ago about the case of Myspace and its page views statistics being […]

  33. […] Inflated MySpace Page Views Explain 10-Cent CPMs MySpace: Design Anarchy that Works MySpace: Unstoppable Force or Unnecessary Click Factory? […]

  34. Deanna says:

    This is insane.

  35. […] been a great metric (better than hits though). It is easy to architect a site to generate more PVs. Mike Davidson explains how MySpace is abusing this. And it’s also easy to game the system for example with a hidden […]

  36. […] known as Ajax. And this technique effectively makes the pageview obsolete. How? Mike Davidson explains it […]

  37. […] What’s missing? The birthday itself. Instead of building trust with its members by providing them useful information, Friendster, too is nothing but a click whore. […]

  38. […] as hit counts to site design decisions that have nothing to do with actual usage. As Mike Davidson brilliantly analyzed in April, part of the reason MySpace drives such an amazing number of pageviews is because their site design […]

  39. […] Inefficiently designed navigation that causes pageviews (See the MySpace analysis, called “The Click Factory”) […]

  40. […] “Click Factory” […]

  41. […] as MySpace pushed past Yahoo in page views. But many contend that MySpace’s poor interface artificially inflates their page views. With good design, it’s suggested that MySpace’s traffic would drop to a third to an […]

  42. […] are security/privacy issues to be aware of. And the huge advertising dollars at stake. I could go on, but I’ll leave it at that for now. I need to get over to my page and change […]

  43. […] maybe the Simple Horizontal Navigation is really, really brilliant. Brilliant like MySpace’s page inflating site design, which makes people have to click multiple tim…. Bean counters love it. […]

  44. Very interesting article to read after Facebook has taken over.

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