Advertisers already know about online ad metrics like cost per impression (CPM), cost per click and cost per action. But as social networks evolve, another measurement is emerging: “Personal CPM,” or broadly, the influence that a person has over their online friends.
Quantifying this measurement means that, advertisers could bid for the endorsements of the most influential individuals in a social network. The idea is described by Forrester’s Charlene Li, as part of a larger piece on the evolution of social networks.
I’ve been spending the past week talking to people in the LA entertainment industry — people here are trying to figure out how to take their talent and make money online. Celebrities already receive a disproportionate amount of attention, and advertisers already pay big bucks to marketers in Hollywood to take advantage of this. The marketers, for example, may party with stars, and try to get them to drink a certain sports drink, wear certain clothing, use a certain phone, etc. Because of the massive exposure the stars get in the press, especially in popular gossip rags, the brands themselves are seen by millions.
Social networks are a relatively untapped, more measurable option.
You can already see the celebrity-influencer phenomenon happening on sites like MySpace, where musicians feature brands they endorse, and widgets of partner companies are spreading across more profile pages, albeit in a less quantified way.
For example, popular rapper Snoop Dogg has more than half a million friends on MySpace. His profile page has received more than half a million profile views. Snoop’s customized version of Twitter, above, is an example of a product that uses his brand to attract users. It lets people send Twitter messages to Snoop and other users, translating each Twitter message into Snoop’s style of injecting the letters “izz” into words in a sentence. (Urban Dictionary offers the full explanation of “izz” here.)
But what are the units of a “personal CPM?” What is Snoop Dogg’s widget worth to Twitter? How many people started using Twitter because they found it on his profile page? How many friends of the Snoop fans started using Twitter as a result? This information can be measured by MySpace and Twitter — in a way that Prada glasses that happen to appear in paparazzi photos can’t.
It is in this context that talent agency William Morris and its Silicon Valley partners are looking to make large investments in companies based in Southern California (our coverage). And, although Silicon Valley and Hollywood experimented with introducing stars to the web back in the 90s, concepts like “Personal CPM” show how things make sense this time around.
During the VentureBeat happy hour in Hollywood this past Wednesday, I talked to a bunch of startups that are building new services based around actors, musicians and others — and the huge number of fans that follow their every move. I came away pretty intrigued, as I told LA startup camera crew TechZulu (video here). I’ll be covering these companies in the coming weeks.
