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Oct. 28, 2010, noon

Engagement: Where does revenue fit in the equation?

Our post earlier this week about philly.com’s seven-part equation to measure user engagement has sparked a lively debate in the comments. The central question: Should a news site’s engagement equation factor in revenue? If so, how?

To recap, Philly.com’s equation puts a numerical value on user engagement by calculating what percentage of the site’s users fulfill certain criteria, including viewing multiple pages, spending more than six minutes on the site, leaving comments, sharing content through social media, or returning regularly. The equation allows philly.com to track how the site is doing in terms of these individual categories of engagement, as well as averaging them out to obtain an overall engagement percentage.

But several people, starting with Sonia Meisenheimer of the St. Petersburg Times in the post itself, questioned the usefulness of an equation that doesn’t take into account how user behavior affects the news organization’s bottom line. Ravi Pathak propsed adding revenue as a coefficient, and Ophir Prusak suggested that factoring in banner-ad clickthrough rates might be a good way to do this. Jim Novo put a different spin on the question, asking:

Another way to say this: does it matter more to you what kind of content engaged visitors in the past, or what kind of content attracts visitors who are likely to remain engaged in the future?

He suggested focusing exclusively on “recency,” or the likelihood that a user will visit the site again, as an engagement metric that speaks more directly to revenue.

But Eric T. Peterson, the author of the white paper upon which philly.com‘s engagement equation was based, jumped in to defend the idea of keeping revenue calculations separate from engagement:

Even in the media and publishing model, engagement and revenue are different aspects of consumer behavior. A consumer can be very engaged with your site but not be tremendously profitable…but you still want a way to measure their engagement independent of profit. Same for satisfaction and engagement — they are different aspects of the consumer experience…Work to understand what my (or any) engagement metric can tell you about your audience first, then go looking for the relationship between engagement and money.

More than a dozen people have chimed in on the issue, and the debate is still going on. You can read the full thread here.

POSTED     Oct. 28, 2010, noon
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