Valuing User Created Content

While adding content manually as an explicit article entry is still a successful practice for building up an asset’s integrity, truly effective websites have been able to scale their content base by providing more of a platform than a depository.

By adding venues for user-based contributions, a website is able to build up its content-base without any explicit effort or cost. This has been taken to the point at which there exist some extremely successful sites that simply have users contribute all of the content that is indexed on the site. Because of the difference in the way which a content-platform creates asset-value in comparison to a traditional article-based website, it is important that we valuate these sites in a way that recognizes their fixed-asset value, and ability to scale.

In general, we can simplify user-contributed content into three main categories. While basic comments have been covered as a content type in the basic valuation article on this page, we can expand on that topic to illustrate how it is that incremental comments add value to a single piece of content. They can be seen as the content-based dividends of a page in the way that they demonstrate the ability of a given piece of content to scale. As comments are added, there is more content on the page to be indexed, and therefore a greater organic traffic implication to the page.

As such, the volume of comments that a given page receives, as well as the rate at which these comments will be added, should be used as the benchmark or discounting the value of the asset. A page that receives a great volume of comments very quickly should have a higher net present value than one that receives many comments over a longer period of time.

Alternatively, a page that receives only a few comments immediately can be seen as being an opportunity for growth, because it suggests that the content is of high-quality, but lacking an exposure base. Because of the popularity of the content, it stands to reason that there is growth-potential in the asset, so long as we are able to increase the content’s exposure to its target audience.

The last thing to take into consideration when looking at comments from a valuation perspective is their ability to re-engage users. While a stream of comments from unique visitors is valuable to a page, repeat comments from the same users should be viewed as exponentially more valuable than one-time comments. Essentially, if a person is returning to the page with the explicit interests of perpetuating a discussion, they are increasing the value of both the asset page itself, as well as their worth as a customer in the way that they are further engaged than just a simple visitor.

As such, it is always a good practice to do a few database (or spreadsheet) inquiries into how many of the visitors are commenting more than once throughout the content base, and whether or not they are engaging in discussions, or simply posting non-contributing comments. From there, we can index for relevance and determine the worth of the content in accordance to a discounting multiple that reflects the true value of the chatter that surrounds a given piece of content as a platform, as opposed to just another article.

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