Audience = Valuation

I've recently been standing up in conferences berating ad agencies for saying one thing (we want targeted audiences) and doing another (booking volume). But this metric seems to extend to the financial market.

The world of Web 2.0 is no different. Recent megadeals have all focused on user metrics - MySpace, Facebook and YouTube floated to the top by virtue of their user numbers.

But is this right ?

The first issue is the value per user of these companies, which is phenomenal. Google paid $82 per user for YouTube. That presumes that each viewer will watch around four thousand video ads to provide a return. Hmmm.

The second issue is the value placed on specific audiences. Publishing has seen far more success of late from highly niche operators than from mass market brands. The lads mags were the last great mass market publishing phenomenon. Now. Boards magazine can easily command five time more cost per reader than a generalist sports magazine. This hasn't yet had any impact on the TV world and has had only limited impact on the online marketplace.

So, quantity over quality seems to be the prevailing consensus in the value of companies involved in TV 2.0. Is that right ?