Blogonomics: Glam Media

Sam Gustin has an interesting profile of Glam Media's Samir Arora today, saying that he's in a battle with iVillage to become "the Web's most popular site for women". But really Glam Media behaves in many ways much less like a site and much more like an ad network. If you have a popular knitting blog, there's a good chance that Glam will sign you up and serve ads up on your site:

The company has partnered with hundreds of special-interest sites, some of them very small and others extremely light on actual content, to display its advertising (Glam does run and produce content for about a dozen channels on Glam.com, but together these only generate about one quarter of the entire network's traffic).

Ad networks like Glam's are a great way for bloggers to monetize their readers without having to try to sell advertising themselves; in the econoblogosphere, Forbes.com is continually threatening to launch its own Business and Financial Blog Network along similar lines. The difference is how you count the pageviews of the bloggers in the network. Do you just sell ads on their behalf, and offer advertisers a large and diverse inventory of adspace? Or do you, as Glam Media does, claim that if you're selling ads on those blogs then you can count those pageviews as your own?

The distinction comes down to what it is that publishers do. If you think the main thing they do is sell ads, then Glam is probably beating iVillage right now. If you think the main thing they do is publish content, then really iVillage is still easily beating Glam, since most of the ads that Glam sells do not run against Glam's own content.

The big difference between an ad network and a real published website is that ad networks make much less money per pageview, and not only because they have to share their revenue with their content providers. Gustin reports that Glam had revenues of $25 million in 2007. If you look at the Glam Media website, it claims "more than half a billion page views per month" and features a pageview graph growing from about 200 million in February to about 1 billion in November. So let's say that Glam got 500 million pageviews per month on average in 2007, for a total of 6 billion for the year. If it made $25 million off those 6 billion pageviews, that works out to just over $4 per thousand pageviews. And if it serves up two ads per page, then that means it's getting, in revenue, a CPM of about $2 per ad. Which is not exactly what it's telling Gustin:

Glam Media, on the other hand, says it charges $8 to $15 C.P.M. rates for its partner sites and $15 to $35 for its owned-and-operated sites (iVillage executives privately question whether Glam really gets such high C.P.M.'s for its traffic).

You can see why those CPMs are being questioned. If Glam Media got a $15 CPM on average, with 2 ads per page, and 6 billion pageviews in 2007, it would have earned not $25 million but $180 million in 2007. Quite a difference.