One of the underlying issues raised by Obama's MySpace Mess is just what it takes to build a mega-group on a big social networking site, and how to value that work. I want to get into that here.
I've seen comments about this controversy suggesting that Joe Anthony's work in creating his myspace.com/barackobama profile page two-and-a-half years ago and building it to the point that he had more than 30,000 friends by the time Obama formally launched his campaign in late January was negligible, little more than stitching together some images and biographical content and then clicking "add" for all the friend requests that flowed in.
But from talking with Joe, and even from Joe Rospars defensive post on the Obama site, it's clear he did a lot more than that and spent a great deal of time--at least five hours a day starting this January, he says--responding to individual emails, pointing people to information on how to register to vote (something he is rightfully intensely proud of), answering their questions about Obama, and so on. If you hired someone to do this for you to promote a movie or a product or a candidate on MySpace, surely you'd have to pay them something. Top internet consulting firms charge anywhere from $50-$150 an hour for staff time. If Anthony put in just 5 hours a day over the last 18 weeks, that could be anywhere from $30,000 to $90,000 in value.
I'm not even factoring in the intangible value of all the good press Anthony's site generated for the Obama campaign as soon as the media started reporting how well the Senator was doing in the "MySpace primary." You can say that if it wasn't Joe Anthony who made Barack Obama so popular on MySpace, and you'd be right, but still, Anthony was still doing the back-end work of building and maintaining a rapidly growing group, and by all accounts did so pretty well. Not perfectly, but when I asked the Obama campaign folks if Anthony's management of the site ever harmed them, they unanimously said no.
And then there's the future value of a vibrant group of 160,000 "friends" on MySpace. Lots of people have expressed skepticism about this (including a truly condescending post on a blog connected to the D Conference about Obama losing the support of that "all-important 13- to 17-year-old demographic at the polls"). If you think the group has no daily life, that once people friended Anthony's Obama profile, consider this: as of this morning, there are at least 18,000 comments from members of that group responding to a bulletin Anthony sent them about the situation and asking for their advice.
Fred Gooltz, a seasoned online communications and political strategy consultant with Advomatic, one of the premier politech boutique shops to come out the Dean campaign (they do PdF and TP's back-end), told me:
I think Joe Anthony was more than fair, he actually greatly undervalued the asset. Care 2 charges about a $1 an email so one could argue that the actual value of the page is between $60k and $160k maybe more when you factor in the future growth, crowd building, widgetized fundraising, clickthrough traffic it generates for Obama's main site.
I asked the members of the TechPresident group blog what they thought Obama's MySpace group was worth, and here are excerpts of their answers:
Tom Belford, who has decades of political fundraising experience and now blogs at The Agitator:
If I had the opportunity to get 160,000 names with email addresses of individuals who had gone to the trouble of registering their support for my cause, and someone else owned/controlled the list, I'd happily rent them at $100 per 1000, or $16,000 in this case. But note that's a per use fee. If the names worked for me (i.e. were fundraising responsive), I'd rent them over and over til no longer profitable. And note further, the list owner would be making the same deal with other list renters who thought the names might work for their causes. As long as the list remained responsive, it could be a cash machine. Another way of looking at it ... if only 10% of these names were fundraising responsive, they might generate $200 each during the course of the campaign = $3.2 million gross.
Mike Turk, former e-campaign director for Bush-Cheney 2004 and the RNC:
Keep in mind that buying names for $1 each you are still buying names that may not be interested in you at all, so they’re likely worth much more. These are probably more comparable to the good, qualified names you would get through your own ads or through organic growth. They want to be with you, and are more likely to engage than names off a rented list....I’d guess that $4 per name is not at all unreasonable given the quality. More importantly, what is the value of all the second degree contacts in a word-of-mouth effort? Those 160k people could easily reach 10-20 times that number if you don't piss them off by shutting their community down. The old saying in retail is if you lose one customer, you've really lost
ten. How many did Obama just lose?
Steve Garfield, pioneering vlogger:
What you'd be getting with the MySpace members would be a community. It's different than a list of email addresses. The members of the MySpace group are people who have a greater chance of participating in group activities, whatever those might be. When you are running a campaign, you are looking to find the important percentage of volunteers who will help you do the work of the campaign. Email addresses might just sit back and donate, MySpace members have a greater chance of leaning forward and participating.
Smart person who has to remain anonymous:
I agree future growth was the main thing. Sure, 160K are worth a lot (in $, activists, etc...) but it's the potential for growth from that starting point that's really big. He was so far ahead of the others and would have just kept getting farther and farther because of that initial advantage. And that initial advantage seems be be largely thanks to Anthony's foresight and diligence. Also: estimating price per name is one way to look at it. Another way is: How many $50K chunks of campaign money will be spent on ridiculous consultants, vendors, staff, lists, props, goose chases and boondoggles? Answer: very many. When you're in Anthony's shoes, you feel like, "I'm supposed to give these guys something incredibly valuable for free out of the goodness of my heart. Meanwhile, they're going to piss away millions to idiots."
Liza Sabater, blogger at Culture Kitchen and Daily Gotham:
...the work he did was akin to a PR rep. Here in NYC you can't hire anybody who will actually get you results for anything less than 5K RETAINER/MONTH. That means that incidentals are over that. I am putting his work at anything between 75 and 100K a year as per market prices in NYC given his value added knowledge of the MySpace natives AND his basic technology expertise.
Michael Bassik, Vice President for Internet Advertising at Malchow Schlackman Hoppey & Cooper, the leading political direct mail and online advertising firm in America:
Another benefit was all the earned media. Any time there's an article or report on the candidates and the web -- as we know there are tons -- they mention (1) MySpace and (2) how Obama's got the most friends. This signals to millions that Obama's exciting, interesting, and very popular on the medium folks are most curious about these days. That to me is worth significantly more than the list itself. 160k names equaled more than 1,000 articles which reached millions of voters.
Fred Stutzman, blogger at Unit Structures
My gut tells me the profile is extremely valuable. Outside of the "list", there's search engine placement, pre-established trust in a "known place", and serious network effects (if 160k people already have Obama on their friend list, he gets seen a lot more often than 8k Obama). On the other hand, and to inject sanity, I wonder how actionable a profile is. If you need any proof of this, look at how bands market themselves on Myspace. It is a time-consuming, tedious, dog-eat-dog job where all sorts of traditional tactics (spam, affiliate marketing, "fan clubs") are heavily used to promote the band. This is not to say that a band marketing on myspace is unsuccessful - ask any band and they'll tell you how important it is. But it is to say that using Myspace as a marketing vehicle is a ton of work, which would discount its value to a certain extent.
Alan Rosenblatt, executive director of the Internet Advocacy Center
A couple of notes on the value of these names compared to Care2. Care2 now charges $3 per email address acquired (it used to be $2). Note:
1) Once acquired, you own these addresses (not rent)
2) They are validated addresses and guaranteed not to duplicate previously acquired email addresses
3) Care2 recruits convert to action at a much higher rate than activists acquired through other means on future calls to action. This cannot be said for MySpace friends.
I also saw an earlier, relevant comment... MySpace friends are not the same as email acquisitions... you can't import them into your CRM and thus cannot fully integrate reaching them with various action technologies like Capwiz/Salsa, etc. So as for the value of the 160,000 names... I would place it at significantly lower than Care2... perhaps $0.50/name, until someone can demonstrate that the friends convert at high rates into volunteers, votes, contributors, etc.
Clearly, while there's wide divergence about the value of Anthony's work and the ongoing value of the MySpace group he built, no one disagrees about the fundamentals. What Anthony did was worth a lot. Clearly the Obama campaign thought what he had built was very valuable too, so valuable that they had to control it. Too bad they weren't smart enough to pay for it.
print
email
delicious
digg
technorati
MySpace Cost
When Murdoch bought MySpace, he paid $580 million. The site had 18.5 million users at the time. Hence, he paid approximately $31.35 per user. 160,000 users at that price is about $5 million dollars.
Granted, Murdoch was buying everything, the infrastructure, the software the name brand, and so on, so this is probably the high end of the valuation.
If the Obama campaign only gets 1% of that value, it is still $50,000