Monday, August 8, 2011
Now the Unsexy ARPU
Online metrics used to be easy, until they didn't mean anything and became little more than competitive hammers in the marketplace.
Metrics are becoming hot again mainly because so many IPOs are coming to market. In his column for the Nieman Journalism Lab Ken Doctor takes a knife (and fork) to this fantasy world of online metrics (www.niemanlab.org/2011/08/the-newsonomics-of-arpu). He mentions Groupon's foggy metrics and balance sheet nonsense: "adjusted consolidated segment operating income." He also cites the Huffington Post claims to have surpassed the New York Times in online traffic.
Doctor suggests that publishers add another metric to the mix: Average Revenue Per User (ARPU), as the telcos and cable TV have done for years, to change the focus from customers or visitors to how much money we are making. By his back-of-the envelope analysis each unique NYT customer in 2010 was worth about $3.54; the Huffington Post about $.96.
In this tale of the tape "unique visitors are a great dumb count." In the future he sees a mobile ARPU,a smartphone ARPU, and so on.
In the last year I have been working closely with network operators.
I think they can teach publishers a few things about digital business models and metrics.