Wheeee.

Super low acquisition costs are being tossed around, with Electronic Arts used as a model — something in the range of 0.30-0.40 cents per customer, because although they actually spent over a dollar per customer, all of those individuals told their *friends*, some of whom now expressed a desire to purchase said game. If their numbers are to believed, almost four times as many “friends” who were never exposed to the advertising now wanted to buy said game, thanks, we presume to word of mouth buzz.

Sounds good, but I have a few questions / issues.

1. The study was produced *by* MySpace: So of course its going to be a positive study, with great results. We should all take it with a grain of salt (as I know you all are already doing).

2. We need independent confirmation of these results: Can the results be replicated if it was tracked and followed by an independent firm on MySpace? Would MySpace ever allow marketing firms this level of access to create their own set of metrics?

3. Operationability of tracking users? How are these users tracked? How do we know that there was a direct connection between individuals exposed to advertising to individuals who weren’t (but still wanted to buy?)

4. Potential customers does not equal actual customers: You cannot talk about return on investment with *potential* customers. You have to follow them all the way to check out, and even then, a great study would follow up on purchases to see how many returned the game. Customers with an intent to purchase might be different in their ability to complete a sale with respect to direct advertising and word of mouth. Would those directly exposed to ads be more likely to purchase? Or would those who were getting “buzzed”? (If you could in fact prove that they were the recipient of said buzz)

I think it makes a great deal of intuitive sense that word of mouth marketing ought to work. It ought to have lower acquisition costs. Its message should spread, and it should spread quickly. And in environments of highly networked individuals, its an attractive thought that word of mouth marketing is an idea whose time has come.

But am I the only person who is wondering about this particular study — funded and commissioned *by* MySpace *about* marketing in MySpace?

So, in an effort to catch up on all my reading, I stumbled back upon MyBlogLog’s own blog to find that near the middle of December, the ubiquitous “Eric” (who is everyone’s “friend” when they start up on MBL) announced that MBL was having difficulties with “spammers”. Well, this is no surprise. Eric, welcome to the price of social software success.

MBL has been growing in leaps and bounds. In a post that never quite made it to being published (in some parts due to sheer laziness, and in others, because my laptop kept on shutting down before I got to save the article), I tried to note that one particular metric had actually been doubling every month, and that was the number of blogs that had included the reader roll that graces this very site (you know, the one with faces). That’s pretty impressive. Its also broken into the Alexa top 1000. Also, pretty impressive.

So, with the number of active MBL’ers doubling every month, and traffic going through the roof, coupled with its unique role in providing a superstantial network layer to blogs, it is no wonder that over the past month or so, I’ve noticed that MBL has been a victim of social software exploitation — or, “gaming”, as is popularly known to SEOs, and Digg fans.

And it got me thinking wherein I came up with a totally unscientific, totally unvalidated equation that might explain the factors which lead to a site being gamed — and there relationship therein.

Eric goes on to say about MBL;

A small percentage of our users try to drive traffic to their own communities (and eventually their own sites) by a) joining hundeds of communities, b) adding hundreds of contacts and/or c) sending out hundreds of messages asking people to check out their communities.

It’s interesting how people respond. Personnaly, I could care less if someone joins my communities or makes me a friend, but heaven forbid they send me an unsolicited message. For other people, it’s just the opposite — they’re fine with messages but they hate it if one of their only community members is an obvious plant.

However, most of these members are also the most engaged in MyBlogLog. When you look at their profiles and communities they have dozens of messages, almost all uniformly positive. People who click through seem to appreciate the attention and appear genuinely happy that somone took the time to interact with them.

So we’re at a loss. On the one hand, we have a vocal group of members asking us to stop letting people fish for traffic this way. These people who want us to ensure that only high-quality connections are let through, either by banning the users or restricting their ability to post or just changing the whole framework of the communities. Then there’s the other group that actually like the random requests.

Now, personally I haven’t been a victim of unsolicited requests to “check out” someone’s site all that often — but I can imagine that as MBL grows, the number of requests of me and mesages left behind onthe DJI community board will also grow. And it would be easy to see how unsolicited pestering (“spestering?”) will rise in a commensurate way as well. Folks have left behind some decent suggestions, including having a rating system for who can contact you, but it got me thinking WHY does this happen, and more importantly, under which circumstances can this happen.

First of all, gaming will only occur when there is something to be personally gained from it. Most social networks tend to be exploited so that they can be used to feed traffic to other websites or blogs. For example, my favourite punching bagg, Digg, represents is a massive fountain of traffic if one manages to get a submission to the front page — in the right circumstances 70-100K uniques in 24h; Reddit, and Netscape much less so. MySpace represents a similar opportunity to drive traffic to off-MySpace sites, even though it contravenes your terms of service. On the other hand, sites like Friendster, because of how they’re built, are not as amenable to driving traffic, and more have to do with personal, professional, or strategic networking.

Where does MBL fit in? Well, I think it certainly fulfills this criteria, as there is a way of identifying and creating blogging contacts who you might not otherwise know about — although its an inefficient system — and can easily send them unsolicited messages.

What’s the rest of the equation? Assuming that a site is amenable to being exploited for personal use, here goes:

And here’s the key:

G = potential to be gamed / exploitated
t = traffic
a = active users
n = number of potential points that can be exploited
m = level of actively committed moderation

While the relationship of these variables are totally untested, I thought I would toss this idea out there so that it can germinate and generate discussion. My thoughts are that the potential for any social network / software site to be gamed is a relationship between roughly three variables – the popularity of a site, the exploitability of that site, and the level of moderation of that site.

That is, as a popularity of a site (t *a ) grows, the chance that it will be exploited increases. No one will exploit something if no one knows about it, or there is no traffic to manipulate.

Another positive factor, (n) is the number of potential exploitable points. As this number increases, the chance that a site will be gamed will also go up, as it provides more opportunities and entry points for individuals to game a site.

As an aside I felt that “popularity” ought to be measured by both the product of traffic and active users. Traffic is an indication that people are going to and using a web tool. The number of active users denotes usage in a different way, and that is usage in terms of contribution. To use Digg as an example, traffic might reflect the number of people visiting the site, and using Digg as a tool to find news, articles, or videos of interest. But active users represent the number of Diggers actually submitting something. In MBL’s case, traffic might represent people clicking through on profiles, and visits to the MBL page; active users represents people who have signed up and installed widgets.

A factor with an inverse relationship, however, is the level of active and committed moderation (m) . If there are enough personnel, and they are accompanied by a managerial commitment to succeed, then this will act as a balancing factor to popularity and exploitable points. That is, as this goes up, the potential to be gamed goes down. An example here would be Netscape, and how they’ve put lots of money into hiring people to keep a close eye on submissions, comments, and content.

Now, you’ll note that I did not say anything about algorithms for moderation.

And that’s because the very notion of putting a software program to monitor ‘gaming’ and roles automatically puts it at odds against people who are looking for weaknesses to exploit. To moderate and control weaknesses require human recognition that something was wrong in the first place; if individuals are gaming a site, it means that there are circumstances that were not planned out for, and a set of rules that are being taken advantage of.

So where does this put MBL?

Given the fact that it is hugely popular now, and that the number of actively installed reader widgets is exploding, it sets the scene for exploitation.

How about the number of points that can be exploited? There are a handful. You can make someone a “contact” without their permission. You can contact contacts without any level of control on their behalf (i.e. “do not contact me”). You can make an unlimited number of contacts over any period of time. There doesn’t seem to be any algorithms to prevent bots from automatically registering and contacting people (no captcha’s for example).

On the other hand, it seems like Eric and his crew are definitely committed to keeping “spamming”, and exploitation of the system beyond its original intentions (whatever they may be), under close guard. He’s already instituted some privacy solutions, and has enabled a “this is spam” flag to messages you might get. A great start. On the other hand, like any startup, MBL probably has a limited amount of resources to devote to this, and time will tell if MBL has the will to keep up both in terms of the personnel needed to attend to the issue, and software solutions to help with that as well.

Is this equation correct? Almost certainly not. But I’m hoping that it does spark some discussion. Who knows, it may even have similarities with understanding how systems are vulnerable to spyware, viruses, and so on — and might reflect published understandings that already exist. Data security hounds — let me know what you think as well.

“Gaming” a system and exploiting its weaknesses for purposes that were not originally intended (and often for personal gain) has been a perennial issue with Digg, particularly as its grown in size and popularity. As Web2.0 runs its course, and other startups start to separate from the pack of also-rans, the phenomena of “gaming” will likely affect many, if not all of them to some degree or another. Since marketers will always look for an edge to grow their own clients or their own concerns, we should expect this issue of social media exploitation to continue throughout 2007.

What other independent factors could we introduce? How can we break up existing factors into more explainable factors? Is the relationship with popularity and number of exploitable points really a “power” relationship? As always, I’m open to your thoughts an opinions on “The Gaming Equation”.

Want to know what Google thinks? Matt Cutts, Google software engineering guru, was interviewed at the recent PubCon in Las Vegas — and its quite revealing. Check out the inteview over here, and fast forward to around the -7:30m point. At that point he starts talking about how Google recognizes social media optimization, and how some marketers might want to use ReviewMe, PayPerPost, or even Text-Link-Ads, and its other brethren to create backlinks to their sites.

The money is in this phrase: “… I’ll put it to you this way — I’m not a fan when people don’t provide total disclosure … if you want to pay for links to generate traffic — totally OK, just make sure it doesn’t affect search engines”.
So basically what he’s saying is that using these sites to create traffic is a legitimate reason for using these services; but to use them to boost your search engine placement is a bad idea. Instead, he suggests using the “rel = Nofollow” attribute to those links, so that Google won’t be fooled.

Matt Cutts doesn’t explicitly say that sites who use these methods in an effort to improve their Google rankings will be penalized in any fashion; however, his language suggests that he is keenly aware of their usage for this purupose, and that it definitely seems a no-no in his book.

And there you have it.

Now, whether or not they have the technology to tell that an advertiser has paid for that link or not — particularly through PayPerPost — is up in the air. But, iIf Google is a god to you, then you’ve just heard it from the lips of one of their high priests — paying for links for the purpose of improving your SERPs is known to Google … and you should use it at your own risk.

tip: Amit Agarwal [through Facebook!]

As of early last evening, Gabe is experimenting with putting Sponsored posts not only on the sidebar — but also including recent posts right into the Top Listing at the 10 spot, starting with CCUCEO’s post on “Just Finished Reading Radical Edge … “. Its high lighted in grey (I think — I’m color blind).

Do they have to pay more for this inserted Top Item placement? Apparently not. He’s offering right now as a bonus right now.

How is the sponsored post chosen amongst the three current sponsors? No, Gabe doesn’t roll any dice (quashing the rumour that for a small sum you can be +2 to to Top Item Placement). Much like the current scheme for Techmeme, its all done by algorithm in the background.

Now, ironically, earlier in the same day (yesterday), Tabloo’s post on Yahoo’s tribulations made it organically into the Top Item list — and is still there above CCUCEO’s sponsored listing.

With Tabloo’s post hitting “Top Item Status” what I’d like to know (and Gabe, you can chime in here on this) is if Gabe is running any metrics in the background to see how these two items compare: does the organic top item per unit time pull in more traffic? (probably) Does it convert better? (probably) Does it stay up longer (on average)? (maybe).

Or, from Tabloo’s side what the magnitude of difference in the sponsored column versus organic placement is (I’m guessing a big difference); back to Gabe — whether or not he gives any rebate back to advertisers who make it into the organic placement, since it really seems like the purpose of those sponsored slots on the side is to get them on the Techmeme page (I’m guessing not).

Bottom line is that the new spot for sponsored advertisers is good news for sponsors and equivocal news for blogs and news sites for now. One question I never go to ask is — does the sponsored site squeeze out any organic placements?

(I’m guessing probably not).

What he also divulged was there is an “x-factor” in all of this — a secret sauce, a trump card, an inside man, a tunnel to that honey pot of Techmeme gold.

What is it?

Its simple — send traffic to Techmeme.

Gabe wants Techmeme to get inbound links. Google juice. Pimp action. To be showered with praise. Have flowers strewn at his feet. First borns named after the news aggregator (“Techmeme Hung?” — that’s a direct IN, and what my next child is named — you heard it here first).

… I think you get the idea. :)

As was clear at the Pre-Mesh Hookup, people know I post frequently, and from time to time, it goes up to Techmeme. So what happens when you actually get listed? What about traffic? Does it compare to Digg? Well, its not what you think.

Here are my thoughts on the whole thing:

My own personal story is that I got listed on Techmeme a few months ago, and I’ve had a few successes with it. In terms of traffic you really only get any if you’re listed as a primary story; very little traffic happens if you’re listed as part of the “discussion” (although its not that I’m not grateful that I’m on there, Gabe!”) — like an extra 20-50 hits max on a huge story.

To have a leading story (one of the stories that has branchpoints, or a “discussion” underneath it), it seems as though you have to be linked to; although, this is not a strict association. That is, if there are people linking to you, you will appear in the discussion; but the algorithm is such that sometimes it will associate related stories sometimes when there aren’t enough.

Also, Gabe does seem to have a manual override button (what I like to refer to as a “Defcon button”) where he can set things right if things are amiss (i.e. important stories are missed, stories picked up that don’t seem to go, overly sycophantic posts — you get the idea).

Now the benefits of a leading story is modest in terms of traffic. You can get uniques coming in to the tune of the hundreds perhaps low thousands, which is nice — but no where in league with the social bookmarking giant, Digg (where you can get blasted with almost 100K uniques in a day — a sort of server stalling avalanche of traffic).

An intangible benefit of a leading story, however, is enormous; and it has to do with the quality of the community around Techmeme — which is incredibly high. I don’t know if Gabe has any demographics — but anyone and everyone in the Tech industry reads the thing … and often several times a day. Its a case of the traffic being much more targeted and influential than Digg traffic, which is often a one-off thing, and, if some data is to believed, full of younger individuals than, say Netscape.

Bottom line — Techmeme is the place where connectors and influentials go; traffic might be modest if you get listed, but its important if you do. To get listed, make sure you’re writing good stuff, and that people know you. Comment on their blogs, start being a little more extroverted, and it will pay in spades. And name your first child after Techmeme. That’s a sure in as well. ;)

UPDATE: For a dissertion-strength diatribe on Google, linking as a central place in an algorithm, and Techmeme, please see Shelly Powers’ blog.  Amongst the points I understand, they seem really strong, like. ;)

Mr. Scoble sympathizes with Mike Arrington:

If you aren’t a journalist or a blogger with an audience you have no idea what Mike is talking about. I get hundreds of emails every day, many of which are from people, companies, and PR firms asking me to blog stuff. …

I absolutely hate dealing with this stuff. For the most part I just simply don’t. I don’t respond. I learned that answering email causes even more email and I simply don’t have time. All I did yesterday was dig through email and I barely made a dent. That’s why I’m up at 2:40 a.m. editing videos.

I guess the question is “Why have an email address at all if you’re not going to bother answering – OR, find it hard to answer in any reasonable amount of time?”

[Aside -- think what you want of Richard Edelman, the dude answers the comments on his blog personally by email -- and THAT is classy]
We can look to Mike Arrington’s own admission that he recently deleted hundreds and hundreds of emails after one wild debauched weekend at the Online News Association Conference as an example.
Perhaps another way of looking at it is that when bloggers get so large they can’t answer their own emails in expedient fashion, should they have an email address to respond to – “disclosing” that people might never get a reply ….

… or do the media 1.0 thing, and just hire someone? 

Why?

For no other reason than his blogging success.
The guy starts out with a half-dead mac-mini one year ago, and starts blogging on Wordpress with a K2 Theme on Technology and other things. One year later after a helluva lot of sweat and tears:

1. Alexa Rank: 24 305
2. Feedburner Subscribers: 2284
3. PageRank: 5

Nice. :)

What’s interesting is that in his one year anniversary post, he makes an interesting comment:

I realize that many of you enjoy reading my content through RSS. That’s good and I wanted to say that I’ll always be providing full, ad-free feeds. However, I encourage you to minimize your RSS aggregator every once in a while and chime in on the conversation, or even start one up. That’s how I know if people are actually listening. Site metrics are one thing; actual, tangible involvement and engagement is another. How will I ever know if I got through to the 3,676 people that stopped by yesterday?

One of my other passing fancies is web metrics. And I think Mr. Stamatiou hit it right on the head with this one. At the end of the day, it doesn’t matter what your Alexa Rank, the number of posted subscribers, pagerank, or other magical forms of metrics you use.

(Well, perhaps if you try and sell advertising on your website it is — but I digress.)

I think the real measure of a site’s effectiveness is just that – how effective it is in garnering an action … a response.

Although most blogs are not geared towards asking for an action, so you can measure a reaction, I wonder if its something that all blogs should do every once and a while.

Sort of like rotating the wheels.

Because all the traffic in the world means nothing if you they’re not responsive to your own writings, thoughts and words. On e-commerce sites this a more mercenary metric is the conversion rate. At the end of the day, the inbound traffic is an interesting number compared to the percentage who actually DO something.

Do I care if your site gets 100 000 uniques a day if

• after repeated solicitations you get no participation in your comments
• you have no signups
• you have no sales
• you have no click throughs on your ads?

Well, again, if you’re selling “reach”, then perhaps not. But conceptually, a better metric than pageviews or “subscribers” is understanding how response they really are. A blog, retailing site, or what have you can survive on minimal traffic if they’re active enough to support the site.

Yes, of course, the irony is that I’m writing about responsiveness, and you can’t help but notice that … well there aren’t too many active conversations on this site.

But then again, I’ve just celebrated my one month anniversary. ;)

But back to Mr. Stamatiou – Congratulations on your efforts. More important than your traffic stats, you clearly have an active and engaged following of fans.

Well done.