Two years after launching (in my living room at a TechCrunch event), web chat startup Meebo has begun to monetize their service.
Normal ad units don’t work on Meebo. While users stay on most sites for just a minute or two before leaving or creating a new page view by clicking on an internal link, the average user session at Meebo is 2.5 hours without any page refreshes. And 20% of Meebo user have sessions of 10+ hours - they basically never close the application. Selling ads based on page view doesn’t make sense at Meebo; instead, they had to invent a new kind of ad.
What they’ve done is create a persistent ad unit combination that allows users to click and add new buddy icons and background themes, watch videos, listen to music, etc. Or simply get rid of the ads. See the screen shot for a visual, and click for a larger view. Ads are charged a negotiated rate, at around a $10 “CPM.” In this case, Meebo will occasionally change the ads during a user session, up to five times per session. Each session is an impression, and a thousand of them are $10. If a user clicks to close an ad, no new one shows up in that session.
So far so good. The ads have only been up a short time and Meebo has just one sales person. Yet they’ve closed “tens of thousands of dollars” in business.
If the ads work, look for other sites to begin to look for ways to copy the idea. VideoEgg recently ported their popular Flash video advertising solution to make it work on widgets in general, and Facebook widgets specifically. Stuff that works persists.
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Bravo
I’ve tended to be overly critical of Meebo in the past because they have never really shown a business model.
Finally, a great way to monetize their service in a non-intrusive way that will doesn’t alienate the users.
Congrats to the entire Meebo team
So far soo good… n wats next ads in my chat?
Billboard Ads on a web app that users use for a long time. Nice…
This is definitely an innovative way to place ad’s, must give them that much.
Pandora’s been doing this for a while now.
They have a full-page ad that surrounds the center music player. Since people don’t tend to have the Pandora page in focus that often, they will “notice you’ve been inactive for 15 minutes” every so often and force you to come back to the page and click something to continue playing the music. At that point, they refresh the ad to a new one, getting another impression.
Pandora’s impressions probably aren’t as effective as Meebo’s, but I see the idea being the same thing.
Pandora’s ads are somewhat targeted in that they know what type of music you are listening to. How does Meebo target their ads?
My guess is that “tens of thousands” refers to a single test buy from a record label that amounts to somewhere between $25,000 and $50,000…all new test media have to start somewhere around there. However, unless Meebo finds some way to segment their user base and prove that this ad unit is actually effective, that CPM is going to drop pretty quickly.
Furthermore, since they’re not using IAB standards, it will be difficult for them to drive adoption of the ad unit…agencies don’t like creating custom creative for test buys.
Good for them. How have they been getting on this long without ads?
Well it’s about time. Of course people don’t like ads but I’ve been using meebo for a long time and when there’s a program like that without obvious income streams (like aim, msn, icq, etc) it makes you wonder if they’ll last. It gives me a piece of mind anyway.
I like it! The page actually looks better with the ad turned on!
Given the change in internet user behaviour and also alternative programming styles (e.g. AJAX), I feel that impressions will slowly start to diminish as a significant metric. Nielsen/NetRatings have already started measuring total minutes per user and total sessions per user. This should help advertisers better judge the audience these sites attract. Meebo is just one of many companies that are leveraging this shift, and I think IAB standards will soon be adjusted.
Shafqat
Oh yes, this pesty business of turning your startup into a money-making enterprise…
cool service!
These were added to meebo on Aug. 19th. Why is it news 2 months later?
Great! Not as good as MSN Ultra-chat but ok!
http://fakesteveballmer.blogspot.com
Meebo will spend a lot of energy on creating this new ad segment..this will lead to a higher burnout…and finally the next players in this segment will built their castles on meebos
http://www.meetingflex.com
Custom Social Networks
Great job on the integration! I am curious, though, to see what they serve over time. Since there does not seem to be any targeting technology, I wonder how long the CPM will stay at 10. Anyone know what type of ads they are currently serving to their users?
It’s really cool. I like the “theme” style of Ads.
Jack
I have to agree with #14 - These backgrounds and other stuff has been on Meebo for a long time now.
good job. Didn’t know it was ur idea.
I’ve been a Meebo user for some time now and I’ve always been impressed by how unobtrusive the Meebo experience is. Good stuff.
Ridiculous to charge only a $10 cpm for ad inventory that only refreshes five times a user session - at 2.5 hours, that’s a 30 minute-long impression!
They should charge way more. Or rotate the ads more frequently. Which I’m sure they gave themselves right and license to do.
I guess my prediction that they would use ads eventually was right :). Didn’t Seth say many times they wouldn’t use ads? I always thought they had a bigger plan for revenue, like enterprise applications…
Also, Yahoo has done something similar with themes on their message client for many years, though not quite as compelling.
don’t get too excited. the major webservices haven’t cared too much about meebo because their userbase is insignificant and it was a nonrevenue site (i.e., no one was taking money away from promotional spends in y! messenger to put money into a meebo promotion).
once the major im providers see ad revenue diverted from their own promotional instruments to meebo…meebo might find their traffic filtered
really this should be on the VC checklist - does your business depend on another host that you are only allowed to backdoor when there is no money involved?
Now it’s only a matter of time before MSN, Yahoo or AOL will yank the rug out from under Meebo. Making money off of other people’s networks? Shame on you Meebo!
What ads?
Firefox + Adblock Plus = 0 adverts.
@23 I also recall Seth and team saying they would never use ads to monetize. Perhaps he just meant traditional ad units. At least have a little innovation behind them.
I started using meebo primarily to avoid intrusive ads. I hope they find a way to make them non-annoying. Otherwise it’s back to gaim for me.
I agree with the various comments asking about targetting the audience base. That is the strength of internet advertising over traditional advertising afterall. Yet, when on myspace and other sites, I still see way too many ads that I’m not interested in. This tells me the technology isn’t up to speed yet. The goal is having the audience want the ad that comes up, because it’s something that specific person is really interested in the ad or invested in the advertised product.