Comments on: What’s the value of a user on your site? Why it’s hard to calculate lifetime value for social network audiences http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/ Essays on viral marketing, freemium, and social gaming Mon, 21 May 2012 01:55:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Thani http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/comment-page-1/#comment-2762 Thani Fri, 02 Jan 2009 03:40:59 +0000 http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/#comment-2762 you can't be more correct.... you can't be more correct….

]]> By: Thani http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/comment-page-1/#comment-2297 Thani Thu, 01 Jan 2009 20:40:59 +0000 http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/#comment-2297 you can't be more correct.... you can't be more correct….

]]> By: Thani http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/comment-page-1/#comment-1269 Thani Thu, 01 Jan 2009 19:40:59 +0000 http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/#comment-1269 you can't be more correct.... you can't be more correct….

]]> By: Jonathan Wong http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/comment-page-1/#comment-142 Jonathan Wong Sat, 24 May 2008 08:35:23 +0000 http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/#comment-142 <p>Believe me, Facebook girls are getting hotter (and trashier) by the day.</p> <p>And there is something about Facebook's cleaner and more professional interface that makes people think they stand a better chance of getting to know these girls... :)</p> Believe me, Facebook girls are getting hotter (and trashier) by the day.

And there is something about Facebook’s cleaner and more professional interface that makes people think they stand a better chance of getting to know these girls… :)

]]> By: Q dub http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/comment-page-1/#comment-141 Q dub Fri, 23 May 2008 21:53:24 +0000 http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/#comment-141 <p>Yeah it's extremely hard to quantify the incremental contribution of promoters/generators. Does that mean you shouldn't put any effort/cost into pampering these "valued" guests, as a casino would? What is the content-site's equivalent of pampering?</p> <p>(I have no idea, just wondering if there's anything we can borrow from traditional LTV/differentiating-offers that's applicable to those active promoters and content creators on your site)</p> Yeah it’s extremely hard to quantify the incremental contribution of promoters/generators. Does that mean you shouldn’t put any effort/cost into pampering these “valued” guests, as a casino would? What is the content-site’s equivalent of pampering?

(I have no idea, just wondering if there’s anything we can borrow from traditional LTV/differentiating-offers that’s applicable to those active promoters and content creators on your site)

]]> By: Douglas Galbi http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/comment-page-1/#comment-140 Douglas Galbi Wed, 21 May 2008 23:32:33 +0000 http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/#comment-140 <p>As of today, if I understand correctly, only a few percent of users account for the vast majority of search engine text ad clicks. On the one hand, that suggests that a search engine should strongly bias itself to collect and serve those users. On the other hand, if the business meta-model is continually innovating in business models, then narrowing the user base might lead to a business dead end. Put differently, part of the LTV of users is their option value for business model innovation. </p> <p>Any thoughts on the LTV of search engine users? <br /> </p> As of today, if I understand correctly, only a few percent of users account for the vast majority of search engine text ad clicks. On the one hand, that suggests that a search engine should strongly bias itself to collect and serve those users. On the other hand, if the business meta-model is continually innovating in business models, then narrowing the user base might lead to a business dead end. Put differently, part of the LTV of users is their option value for business model innovation.

Any thoughts on the LTV of search engine users?

]]> By: Oren http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/comment-page-1/#comment-139 Oren Tue, 20 May 2008 22:27:40 +0000 http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/#comment-139 <p>Great post (as always) Andrew.</p> <p>I agree with your point and the complexity of measuring the value of a user to any web business. <br /> But I do feel it's best to actually treat the following separately:<br /> (1) The direct monetary value of a user (Monetary-LTV?). <br /> (2) The value of their contribution to a site/community (Community-LTV?).</p> <p>The former deals with the question of "how you make money" the later "how you build a community" . Not exactly the same. </p> <p>The former specifically is quite easy to model and all web startups should (but not many do) </p> <p>The later is a bit more tricky because, like you stated, it has a lot to do with the quality of content produced and its (actual or perceived) value for viral-growth or retention. Tricky but doable if you narrow down to this definition for a particular social-network or property</p> <p>Incidentally, one can argue retail sites have the exact same issue (think of Amazon product reviews, ratings etc.). It's just that their (actual) per-user-monetization is more robust & clearer...</p> Great post (as always) Andrew.

I agree with your point and the complexity of measuring the value of a user to any web business.
But I do feel it’s best to actually treat the following separately:
(1) The direct monetary value of a user (Monetary-LTV?).
(2) The value of their contribution to a site/community (Community-LTV?).

The former deals with the question of “how you make money” the later “how you build a community” . Not exactly the same.

The former specifically is quite easy to model and all web startups should (but not many do)

The later is a bit more tricky because, like you stated, it has a lot to do with the quality of content produced and its (actual or perceived) value for viral-growth or retention. Tricky but doable if you narrow down to this definition for a particular social-network or property

Incidentally, one can argue retail sites have the exact same issue (think of Amazon product reviews, ratings etc.). It’s just that their (actual) per-user-monetization is more robust & clearer…

]]> By: peter http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/comment-page-1/#comment-138 peter Tue, 20 May 2008 18:59:06 +0000 http://andrewchenblog.com/2008/05/20/whats-the-value-of-a-user-on-your-site-why-its-hard-to-calculate-lifetime-value-for-social-network-audiences/#comment-138 <p>The answer is easy. There is no loyalty to social networks because the only value is connecting with their friends, for example. There is no stickiness to that. One thing that means more than friends in ones passions. For example, you have some 20 year old on FB who has 10 friends there. His passion in life is skateboarding and hopes to be a professional skateboarder. He heard about a new Tony Hawk niche social network where not only does Tony talk to you, 20 other professional skateboarders talk to you. So will this guy leave FB? Naaaa. Will he quit going there less and less, the more this new skateboarding social network adds more value? I think so. - Again... if social networks want to evolve to the next stage, they must get past relying on advertising as their only main source of revenue and add more value for stickiness other than, a place to superpoke your friends. </p> The answer is easy. There is no loyalty to social networks because the only value is connecting with their friends, for example. There is no stickiness to that. One thing that means more than friends in ones passions. For example, you have some 20 year old on FB who has 10 friends there. His passion in life is skateboarding and hopes to be a professional skateboarder. He heard about a new Tony Hawk niche social network where not only does Tony talk to you, 20 other professional skateboarders talk to you. So will this guy leave FB? Naaaa. Will he quit going there less and less, the more this new skateboarding social network adds more value? I think so. – Again… if social networks want to evolve to the next stage, they must get past relying on advertising as their only main source of revenue and add more value for stickiness other than, a place to superpoke your friends.

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