Thinking Through the Entrecard Changes
I’m not the biggest Entrecard user on the Net, so it took me until early this morning to notice the ad price inflation that has taken place on the service.
The change was intended to make EC more of a marketplace rather than a popularity contest, but the result, at least in the short term, was to devalue the Entrecard credit as a ‘currency.’
Right now, there are very, very few sites that it would be smart, from an economics point of view, to advertise on with EC credits because they are simply a BAD DEAL.
I’m not talking hypothetically, here.
Take ProBlog Reviews, for example. A site with four months of archives and a PR0, is currently at top of the Make Money Online price list at 262144 EC credits per day.
Given the average market price of credits on Ebay for the past month, which is approximately .0045 per credit or $4.50 per thousand credits, advertising on this blog would cost $1,179 per day in real cash value.
Problogger.com’s ad price is currently listed at 131,072 EC credits per day, which in real value terms is about $590 per day or more than $17,500 per month. I think you can get a better deal on his regular ad space through B5 Media.
John Chow’s blog will cost you a much lesser amount… 8192 EC credits per day. Still, that’s a monthly ‘real cash’ rate that’s double his ‘get reviewed by’ price. You’d be better off buying direct.
My estimate is that the Ebay price for EC credits is currently way too high. The ‘real’ price - based on advertising value - under the current credit system is .00125 per credit, or $1.25 per thousand.
So, what to do.
First, don’t buy EC credits from Ebay until the price stabilizes under the new system. Second, don’t advertise on any sites over 128 credits until prices stabilize. Till then hoard your credits or exchange with other EC users for things of real value like reviews or permanent links.. Finally, keep reciprocating and dropping, since this is still, and will remain, a very valuable way to grow traffic to your blog.
ONE FINAL THOUGHT
I recall reading somewhere that EC will begin selling credits for $10 per 1000 EC credits. Under the current credit advertising system, I don’t think this will work for them.
Assuming the biggest and best blogs out there charge $10,000 per month for an ad –and that’s way more than I’d be willing to pay, but just go with me here — then the ‘real money’ daily price for an EC widget ad shouldn’t be more than $333. If the folks running EC want the value of 1000 credits to be ~$10, then ad prices for any blog should max out at about 33,333 EC rather than the hundreds of thousands of EC they are at right now.
Does that make sense, or is my math off?
All other thoughts, opinions, or disagreements are welcome in the comments.
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2000 Entrecard credits(cheapest ever!! start at 1cent!) US $0.56 (2 Bids) End Date: Sunday May-18-2008 21:37:41 PDT Bid now | Add to watch list |
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2,000 Entrecard credits US $5.99 (0 Bid) End Date: Tuesday May-20-2008 9:36:13 PDT Bid now | Add to watch list |
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5,000 Entrecard Credits For Sale US $5.50 (1 Bid) End Date: Tuesday May-20-2008 22:31:19 PDT Bid now | Add to watch list |
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5000 Entrecard credits US $9.00 (0 Bid) End Date: Wednesday May-21-2008 0:30:38 PDT Bid now | Buy it now | Add to watch list |
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3000 Entrecard credits(cheapest ever!! start at 1cent!) US $0.01 (0 Bid) End Date: Wednesday May-21-2008 1:55:00 PDT Bid now | Add to watch list |
April 9th, 2008 at 6:19 pm
Nice breakdown of the changes in economic terms. I have one blog that is renting for 64 credits and another that is priced at 4096. It does not make any sense to me.
Thanks for the heads up on buying credits. I was thinking I needed some, but I think I will wait.
April 9th, 2008 at 8:11 pm
You’re right on the spot there, Wendy. Always let people take their chances while we watch the struggle for a new stabilized point. I love that.
And yes, your math is alright.
April 9th, 2008 at 9:45 pm
I agree!!
I work in online advertising and even the BEST parenting demographic websites don’t receive much more then $5.00 CPM (per 1000 ad impressions) for top fold rich media content geotargetd to the USA only.
EC offers no geotarget I would like to see their user Geo location breakdown as I see MANY non prime advertising users outside of North America and Europe.
April 9th, 2008 at 10:26 pm
@CyberCelt: Thanks for your comments. The idea of X2 as an increment is very flawed. I think there’s definitely going to be some further tweaking before EC is done with this.
@I Review You: Yep, no sense in panicking, or tossing the widget while there’s still some value to be had, but I’m not going to throw my hard-earned credits around until I actually see some deals again.
@Karrine: Thanks for your input! I hadn’t thought about geo-location before. It would be a neat option to have.
Eventually, I think EC is going to see that 1) the maximum ad price needs to be capped much lower than it currently is and 2) the price increments need to be much more gradual at the higher levels.
April 10th, 2008 at 10:42 pm
Thanks for a reasoned response… give it time, it’ll smoothe itself out…
April 12th, 2008 at 1:55 pm
[…] Entrecard, they have changed the way you collect credits from advertisers. As a result of this change, quite a few blogs have stopped using […]
April 13th, 2008 at 4:10 pm
hi, can you link me up on your site?
April 13th, 2008 at 4:25 pm
You are right Wendy. Karrine is right as well, some of the best sites that get a lot of pageviews a day dont cost so much.
ReelNinja
April 13th, 2008 at 5:05 pm
Hi everyone!
I have only just joined Entrecard and I am still finding my feet. However, I do think those prices for advertising is crazy! Surely, based on your brilliant math skills ;-), that it would be cheaper to advertise on some of the top ranking websites that get a huge amount of traffic!
I have to admit though, I am not into the advertising side of Entrecard and I am unconcerned about the prices. I use Entrecard to surf other blogs while I am taking a break from work!
Sarah
http://www.copywritingtipsandideas.com
April 14th, 2008 at 12:28 am
Hey, LOL I did not have anything to do with that 200,000 entrecard deal.Although I do not have but 4 months worth of archives is true, I have been commenting and dropping cards like crazy also. I think my price is coming down now that no one can afford to advertise on my blog. Before the price change took effect it was only 300 ec a day to advertise. But thanks for visiting my archives. I am glad there are others that read some of the blogs also instead of just dropping cards.
April 14th, 2008 at 12:55 am
I have to agree. The new advertising system at Entrecard has the concept of supply and demand, but goes about it completely wrong. The entire “doubling” of prices is absolutely ridiculous and is terrible for the individual blogger in terms of setting/getting a fair price.
April 15th, 2008 at 5:40 pm
Wow we are new to Entrecard and had no idea! Today is or very first day, and you have provided us with a lot of information to think about!
April 18th, 2008 at 5:20 pm
Thanks for the thoughtful post, I liked the way it was before where I could easily find blogs near me - geo tag style
Find it less friendly than it was before- now concentrating specifically on my area, although doind a review of entrecard currently and analysing the categories is fun- think they need to do some revision here.
April 20th, 2008 at 7:17 pm
I wouldn’t every pay for credits. While I don’t mind using my credits to advertise, dropping and having return drops from other bloggers is why I spend the time and effort on Entrecard. Finally a system that drives traffic. It has impacted both mine and my husband’s traffic in a big way.
April 27th, 2008 at 8:46 am
i love entrecrad, its 30% of my blogs traffic!!
April 28th, 2008 at 12:58 am
Thanks for the information! very useful!
Tony