Come On Nick, You Can Do Better Than That

Choire Sicha, former editor of Gawker and now co-founder of The Awl, points out that the Gawker offices have a large screen mounted on the wall that shows the top most-read stories on the site in terms of unique visitors, allegedly to motivate writers at the blog network (although it’s interesting to note that this screen is described as being in the reception area rather than where the writers can see it). Gawker also posts its top-read stories in terms of both pageviews and unique visitors, which is an interesting page to watch.

That said, however, pageviews and even unique visitors are only a couple of the factors that media entities need to be concerned about — as I tried to argue in this post (check the bottom for recent updates), based on the Twitter debate between Reuters writer Felix Salmon and Business Insider founder Henry Blodget — and neither one of them is arguably the most important. Yes, they are the metrics with the largest numbers, and so they impress some advertisers and possibly some competitors. But they are also subject to inflation by girls kissing and slideshows, as Felix noted in the tweet that started his battle with Blodget.

Denton says he agrees that pageviews and uniques aren’t the best measures, and asks for others that are better. Okay, Nick — what about time spent with a story? Why not put that up on a big-screen TV on the wall? What about the number of repeat visitors that a writer gets over a month? Or what about the number of comments on a story, multiplied by the number of times a writer actually responds? Gawker is one of the most forward-thinking sites on the Web when it comes to comments and how they are managed, and from what I have seen their writers — particularly Denton himself — are good about responding. That’s a far better metric of value in my books.

Soon, advertisers will realize that chasing after raw pageviews and
big unique visitor numbers is a mug’s game, and one that Demand Media
and Associated Content and similar content factories will win every
time
— and arguably many advertisers are already realizing this,
which is why CPMs generally suck. So what starts to matter more?
Engagement. Admittedly, it’s difficult to measure (let alone define),
but that doesn’t make it any less valuable.

Update: In a tweet to me, Nick says that comments are “a horribly misleading measure, e.g. commenter delight at a blog squabble is inversely related to wider appeal.”

Mahendra Palsule also has a thoughtful post about the move from number-based metrics such as pageviews and CPMs to relevance-based measurement and tools.

Is the Web bubble back? Ask Hitwise

From the London Telegraph comes a rumour that Hitwise — one of the half a dozen web-traffic measurement companies whose stats show up in press releases, and are used as fuel for takeover rumours — is itself the subject of takeover talks, with the price tag reportedly an eye-popping 180 million pounds or about $350-million (U.S.). Joe Duck says this sounds about right if Hitwise charges its 1,200 or so clients an average of $2,500 a month for access to its data.

I’m not sure where Joe gets those numbers from, but let’s assume he’s right. That works out to annual revenue of about $36-million, which makes the rumoured takeover price between 9 and 10 times revenue. Joe says that’s “not outrageous” for an established and growing Internet company, which leads me to believe one thing — no, not that Joe is on crack, but that he has a very high threshold for outrage.

bubble.gif

I think between 9 and 10 times revenue is bubble-type math. And yes, I know that Google sells for 15 times revenue; in fact, that actually helps my case. Obviously, traffic measurement is a hot area right now, primarily because advertisers are desperate to find a way of deciding where to put their money, and websites are desperate to find a way of proving they are the right place to put it.

Using page views as a metric, as Steve Rubel notes, is broken. But then, the different standards used by Hitwise and comScore and Nielsen and Alexa aren’t much better. As Matt Marshall pointed out, website measurement as a whole is a train wreck. Alexa only measures users who install a browser plugin and is biased towards the U.S.; comScore uses a piece of software that has been accused of being spyware; Nielsen phones people and asks them what they do; and Hitwise uses ISP log files.

What you typically wind up with is half a dozen measurements that all say something different — in some cases, one firm will show a website falling in popularity or flat, while another shows its traffic zooming. Is Hitwise any better than its competitors? Who knows. But any way you slice it, 9 or 10 times revenue is a boatload of cash.