An interesting case study came across my desk today. The question is a compelling one, ” Are advertisers better off working to roll up huge media properties in a boutique network or is greater opportunity in aggregating a much larger number of smaller properties?”

For this case study, we are going to look at two very different advertising networks — John Battelle’s Federated Media and IZEA’s Social Spark (formerly PayPerPost).

comScore

When I first had an opportunity to look at the comScore data for these sites, the first thing that jumped out at me was the substantial difference in reach between these networks. If you look at the Unique Visitor index for March of 2008, you’ll see that the blogs covered under Social Spark have over twice the (relative) number of uniques. For a network that has only been active for a month, this is an incredible amount of growth.

How do you explain it? It all boils down to the differences between how these two properties operate.

Federated Media hand selects blogs to be members of its network. Almost all of these blogs represent the “top tier” of bloggers in their respective fields, and they generally have much larger reader bases than the blogs covered by Social Spark. Social Spark, on the other hand, uses a “marketplace” model and thus is capable of covering thousands upon thousands of blogs with very little overhead.

The end result is that by tugging at the long tail they have far exceeded Federated Media’s ability to increase their inventory.

What does this mean for ad buyers?

Does Social Spark win?

Not necessarily.

If you look at the data a little more closely you’ll notice another very telling trend. For the three metrics that measure audience engagement (Minutes Spent on Site, Pages Viewed and Minutes Per Visit) the Federated Media properties vastly outperform the Social Spark sites. It seems that while Social Spark has discovered a perfect formula to increase their reach, without the strict quality controls that Federated Media has in place the audience they attract seems to be more transient.

For some advertiser, this might not matter, but as the landscape changes there is a growing trend towards advertisers trying to attach themselves to the brand of the properties they purchase space on. For those advertisers, buying a Run of Network or even a smaller, active community might not have the appeal of advertising on a site like Boing Boing.

The brings us back to our original question.

Taking only this data into account it seems that the choice for advertisers is really a question of ROI versus Branding. Social Spark offers a platform that allows you to reach a huge audience at a low price, the downside is that you don’t get the clear branding that attaching yourself to a huge media property affords you.

Like many advertising decision online, the final answer is just another open question — what do you think?

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