Social Mode

Last time I wrote a huge, esoteric post on why traditional media is in for a rough time. Perhaps you read it, perhaps it was too old school or boring or long.

I can show you better than tell you.

Here is the culprit of the trouble in old media:

see more crazy cat pics

Why is this cat to blame?

That’s right icanhascheezburger.com, a collection of LOLCAT (funny cat pictures), has over 2,500,000 unique users each month and over 10,000,000 visits generating 40,000,000 pageviews. And it’s a blog. Yup, built right on a blog service, WordPress.com.

[Note: 12/15/2008 – look how this sucker continues to grow.  and look at how big brands have flailed recently.  the cat is out of the bag.]

That’s a top 1000 site. That’s right out of the millions of sites, brands, products on the internet… funny pictures of cats beats 99.9% of them.

Is there money in that? Yup. Real money.

They probably get at least a $1 effective CPM on all the banners, text links and backfill. That’s at least $39,000/mnth in backfill.

“Right, Russ, but real brands would never advertise there!”

Oh, right, IAMs, Budget Rent-a-Car, and Showtime (just what’s showing today and is TARGETED)… those aren’t brands.

Also, how big is the pet industry? $10+ billion. Think there are any CAT OWNERS AND LOVERS ON THIS SITE? How about other demos? http://www.quantcast.com/icanhascheezburger.com/demographics

skews RICH and EDUCATED and YOUNG = a marketers dream. Yet, the advertisers and media buyers go to places like PEOPLE.COM which has a much smaller visit amount and an Older, less educated audience.

Ok, let’s not look just at the ad revenue side. let’s look at the COST of this.

The average LOLCAT is 35KB. Storage amount each month

35 kilobytes * 39 000 000 = 1.27125531 terabytes

The size of the page itself is about 200-350KB with all the scripts and what not so you are looking at almost 13000 GBs transfered per month

Using amazon s3 pricing as a basis you get to around 3000/mnth to host this site.

There’s probably 1 or 2 FTEs running it at about $7-10K per month

Net Profit: $10-20K per month.

Other interesting costs to think about:

• Cost of bandwidth and storage at corporations where the pictures are cut and pasted and emailed 100s of times a day
• Loss in productivity from people creating and trading these

Now, consider that iCanHasCheezBurger contributes 5% to WordPress.com Unique user traffic, slightly more of its visitor pie. WordPress raised nearly $30,000,000 in financing, so we can losely say LOLCATs are worth 5% of that, or $1,500,000.Real money. Real value. Undervalued really when you think about the marketing opportunity and the fact that you can consider over 50% of the audience on the site as “addicts” – very aggressive consumption.

What’s so hard for old media to grasp is how this can happen. You can’t budget it, you can’t model it, you can’t plan for it. 30 years of building brands can’t compete with it.

Contemplate that for awhile as you wonder how to make money on the internet.

see more crazy cat pics

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