Steemit got a new cool feature just recently - the ability to promote posts for greater visibility.
I was curious to see if the system works, and generally speaking, if its a profitable venture.
Transactions
First, lets look at @null's transaction volume.
Chart:
The purple line represents the total cumulative transactions (or @null's account balance), and the blue line represents the daily transaction volume, for the past 10 days.
Data:
Profitability
Now, my question is, are promoted posts profitable? In other words, does the total rewards payout from promoted posts exceed the amount of SBD spent for promotion?
Chart
The purple line represents the total rewards earned, and the blue line total promotion costs.
The spread between the blue and purple line is profit.
If we look at all the posts that have been promoted, we can see that in general, they have been very profitable so far.
Now lets look at the individual posts...
Top Promoted Posts, by spending
Chart:
Data:
| Post | Paid | Earned |
|---|---|---|
| @ned/increasing-curation-demand-for-steem-power-and-community-interaction | 500 | 48.68 |
| @laonie/robinhoodwhale-01-09-2016 | 271 | 55.667 |
| @kafkanarchy84/my-new-steemit-life-ep-1-write-write-write-and-fill-me-up-barkeep | 250 | 117.33 |
| @timsaid/steemit-explorers-the-human-senses-part-i-sight | 202.02 | 668.431 |
| @leavemealone/ned-and-dantheman-dump-50-500-steem-on-market-today-wtf-is-going-on | 201.352 | 17.999 |
| @serioustruth/why-we-can-all-succeed-in-life | 200 | 35.27 |
| @pinkisland/teaching-as-a-career-or-analysis-of-the-book-teachers-schools-and-society | 200 | 31.089 |
| @benadapt/rent-a-fire-tower-and-camp-in-the-sky-featured-author-announcement | 160 | 106.287 |
| @horizonkinetics/technical-problems-of-a-fixed-money-supply | 150 | 47.648 |
| @tuck-fheman/when-concerning-steemit-i-ve-come-to-realize-i-m-too-old-for-this | 138.99 | 95.827 |
| @woo7739/unreleased-steal-cut-of-slient-hill-no-its-real | 121 | 16.928 |
| @steemapp/ann-steemy-mobile-app-beta-available-for-ios-android | 110 | 293.679 |
| @fyrstikken/time-to-talk-about-our-tube-the-decentralization-of-youtube | 101.573 | 105.415 |
| @churdtzu/steemit-will-make-the-world-an-anarchic-voluntary-society | 101.1 | 285.937 |
| @claudiop63/steembets-bet-for-free-by-upvoting-and-win-steem-dollars-inauguration-bet-clinton-vs-trump | 101.01 | 23.425 |
| @calaber24p/revamping-curation-is-the-way-to-increase-steem-power-demand | 101 | 891.638 |
| @biophil/the-world-s-best-waffle-recipe | 100.01 | 168.154 |
| @steemitjobs/new-steemit-job-posting-blockchain-developer | 100 | 17.004 |
| @neilstrauss/the-steemit-book-club-begins-monday-details-call-in-numbers-chat-channel-party-tricks-inside | 100 | 547.373 |
| @craig-grant/steem-report-curation-and-steem-power-ideas-by-ned | 100 | 1.395 |
| @fyrstikken/steemit-harassment-wow-it-finally-happened-to-me-too-d | 100 | 106.259 |
| @dantheman/censorship-is-impossible-in-a-free-society | 100 | 1177.59 |
| @the-alien/logic-and-fiat-money-are-they-mutually-exclusive | 100 | 1130.26 |
| @steemitjobs/new-steemit-job-posting-community-and-social-media-manager | 100 | 33.955 |
| @steemitjobs/new-steemit-job-posting-front-end-developer | 100 | 24.361 |
| @cryptovoices/25-years-after-the-soviet-union-watch-the-other-dream-team-to-remain-inspired-for-liberty | 97 | 3.951 |
| @karnal/alimony-my-wallet-no-choice | 93.304 | 102.51 |
| @clayop/how-much-do-whales-influences-on-rewards-introducing-new-statistics | 80 | 687.762 |
| @peacekeeper/my-facebook-and-steemit-post-side-by-side-two-2-days-ago | 76 | 21.781 |
| @steemitqa/uplift-your-story-submission-to-the-top-of-post-promote-uplift-minnows-initiative | 75.915 | 9.125 |
Top Promoted Posts, by earnings
Chart:
Data:
| Post | Paid | Earned |
|---|---|---|
| @charlieshrem/a-geek-in-prison-a-life-series-by-charlie-shrem-part-4-getting-sick-sober-and-healthy-with-yoga | 3 | 2963.61 |
| @dantheman/why-do-we-fight-to-change-the-world | 0.01 | 2585.92 |
| @peerplays/peerplays-status-udate-09-01-2016 | 1 | 1842.25 |
| @klye/let-s-get-steem-and-sbd-steem-backed-dollar-accepted-on-coinpayments-net | 1 | 1757.92 |
| @cryptogee/a-quick-fix-for-a-broken-capitalist-society | 5 | 1605.75 |
| @officialfuzzy/e171-beyond-bitcoin-peerplays-testnet-updates-blockpay-ico-hackathon-btsabc-and-more | 3 | 1561.61 |
| @richman/the-largest-aircraft-in-the-world-back-to-the-future | 1 | 1423.34 |
| @dollarvigilante/putin-prepares-for-nuclear-war-just-week-after-germany-prepares-for-attack | 50 | 1330.93 |
| @jpiper20/steemit-s-first-professional-wakeboarder-jefferson-langley-the-face-of-shreditz | 40.461 | 1315.76 |
| @dantheman/censorship-is-impossible-in-a-free-society | 100 | 1177.59 |
| @the-alien/logic-and-fiat-money-are-they-mutually-exclusive | 100 | 1130.26 |
| @steemdrive/steemdrive-second-proof-of-successful-crowdfunded-billboard-flight-in-durban-south-africa | 1 | 892.746 |
| @calaber24p/revamping-curation-is-the-way-to-increase-steem-power-demand | 101 | 891.638 |
| @anwenbaumeister/pura-vida-my-experience-working-on-a-permaculture-farm-in-costa-rica-part-two | 0.1 | 826.324 |
| @steve-walschot/steempay-mobile-wallet-developer-update-consensus-reached | 55 | 811.172 |
| @officialfuzzy/e172-beyond-bitcoin-peerplays-talks-legal-sharedrop-and-testnet-jewels-ico-success-gridcoin-and-making-it-rain | 1 | 778.368 |
| @sigmajin/the-tale-of-the-5-brothers-a-voting-power-parable | 25 | 747.459 |
| @dantheman/justification-for-104-week-power-down | 1 | 738.979 |
| @clayop/how-much-do-whales-influences-on-rewards-introducing-new-statistics | 80 | 687.762 |
| @timsaid/steemit-explorers-the-human-senses-part-i-sight | 202.02 | 668.431 |
| @mikehere/downsizing-and-living-in-paradise-off-the-grid | 33 | 644.565 |
| @officialfuzzy/guest-signups-beyond-bitcoin-hangout-172-9-9-16-rsvp-to-friday-s-hangout-refer-projects-for-rewards | 1 | 643.632 |
| @neilstrauss/the-steemit-book-club-begins-monday-details-call-in-numbers-chat-channel-party-tricks-inside | 100 | 547.373 |
| @larkenrose/civil-rights-fairness-fascism | 1.06 | 455.395 |
| @richman/the-largest-aircraft-in-the-world-the-story-continued | 1 | 448.578 |
| @liondani/steemit-gr-deserves-more-than-usd1-82-doesn-t-it-repost | 1 | 430.816 |
| @tony.jennings/machinery-of-freedom-ask-questions-like-a-young-child | 1 | 388.237 |
| @steemcleaners/steemcleaner-report-for-the-week-of-aug-22-aug-28-2016-part-1 | 10 | 371.566 |
| @gavvet/telescopic-tour-featuring-luision-as-author | 0.1 | 368.772 |
| @jpiper20/lonely-deja-vu | 30.238 | 363.142 |
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It's pretty obvious to me that the promotion has little to do with total earnings of the post. The posts that receive the most earnings are those from the users who already receive big earnings from their posts. If a user routinely earns $500 per post, and they promote one of their posts for $100 and it receives its usual $500 payout, then the promotion wasn't actually beneficial.
Based on the stats, there doesn't appear to be any causal relationship between promotion and payouts. Actually - I think this could make a case that promoting is generally not beneficial for nearly all users.
Whether promotions do have a positive effect on the payouts, I don't know. One thing that is for certain, is that generally speaking, the market participants are not losing money on promotions as a whole - in fact, again, generally speaking, the promoted posts generate several folds more revenue over the promotion investment.
As you have pointed out, it would be interesting to know how much of the revenue is actually caused by the promotion. Unfortunately, I don't know of any good way of figuring that out at this moment.
Rather than looking at the total payouts for promoted posts, we should be looking at the total number of posts that used the promotion feature, how many of those posts covered the promotion costs after payout, and whether or not the payout was higher than their average payout from prior posts.
That's a lot of data to collect, but that's really the only way to get a more accurate picture of the utility of the feature. Looking at total earnings without acknowledging previous success of the users doesn't give an accurate measure of the potential benefit of the feature.
Like I mentioned in my first comment - if someone averages $500 per post, then promotes a post for $100 and earns another $500 payout, we can say that they likely lost $100 on the promotion. It didn't actually improve earnings.
Anyway - I'm glad to see your stats and it'll be interesting to continue watching how this evolves. Maybe a program can be created to calculate what I mentioned above?
I think the main benefit for promotion is to get more followers. The actual payout is based on the luck of enough whales upvoting you. It depends what you value. If you want pure profit then it is not worth it. If you want people to read your posts then it may be worth it.
But the question then is, are more people actually reading these posts and following the authors? More data to collect! (But the first data set really isn't possible to know, currently.)
I don't think it's fair to call that the "profitability" of the posts. The highest-earning promoted posts are mostly by authors whose posts all do well regardless.
What would make this a fairer comparison?
Maybe something like this:
For instance:
A user's previous 5 posts earned: 200, 100, 0, 150, 50
The average of those 5 posts is $100.
This user's promoted post made $120 after spending $30 promoting it.
According to your calculations, this would be a $90 profit.
$120 (post earnings)-$100(average post)-$30(money spent promoting)= $10 loss
There are still some problems with this, but I think it's a much better way to calculate profitability.
Problems
@furion
Seeing as you are the stats man, can you do an analysis of steemit when voting was restricted to 10 a day compared to voting at 40 a day?
I feel that a lot of accusations are flying back and forth about the coming voting change, but no-one has done a proper analysis of the previous voting change.
I will not, as I wasn't around when that change happened, and I assume that a.) It was a different type of change and b.) the ecosystem was much different back then - so I don't feel like it would compare well.
I might however do some sort of analysis on the new change, as it happens. Any ideas for what to look for are welcome.
Can you not pull data from the blockchain for the historical analysis?
Going forward, the key metric is the number of votes cast compared to the number of posts written. And also an analysis of the distribution of payouts - for example, will restricting the votes to 5 per day mean that the whales all vote on five posts from "stars", giving those posts an extraordinary share of the pot?
another question is (and we may not know the answer): how would the top payout would have fared without being promoted. in other words, maybe the posts that received most payout would have received the same payouts without being promoted.
I'm asking this because of the many inconsistencies: the posts with huge promotion and very little payout :)
This is exactly why this analysis is constrained to 'generally speaking', and why there is no commentary on individual post data.
It is impossible to determine causation with any degree of certainty. For instance, this post was promoted too, and just recently upvoted by both Ned and Dan. However, how could I know, with high degree of certainty that the exposure from promotion brought them here? What if the post was actually referred to them by someone else, who saw it in steemit.chat, or is perhaps my follower, or someone who just likes to scroll trough entire trending page every day.
Given the lack of information, any 'evidence' to support a case would be anecdotal at best.
Perhaps with due time, as the sample size grows, we could infer some patterns. Right now however, we simply don't know.
To add to my previous answer, perhaps it would be interesting to also look at other variables, such as increase of followers post-promotion, or count of votes/comments in compare to non-promoted posts by the same author.
The sample size would have to be statistically significant to draw conclusions, and I will probably make a follow-up in due time.
I love your posts and what you contribute to steemit. I think the conclusion is wrong however, so I wrote a follow up post: Most promoted posts aren't profitable.
If I turn out to be wrong, oh boy will I look silly :)
Always nice to see data presented intelligibly. :)
Though, I think promoted posts should probably not be evaluated based on post rewards... it's a little early to tell what the predominant use case will be.... but the results of this sample will clearly be skewed by the 500 sbd that ned threw down to promote his post after other whales had flagged it down to under $100 reward... hard to imagine that is representative of... well, anything, really
If I do this report every 10 days, eventually statistically significant patterns will emerge.
How much do whales upvote promoted posts relative to ordinary posts? Is more money going out than coming in? Is promotion bringing in new users?
that would be a good statistics as well
I've tried to promote someone's post with 1 SBD . It didn't make any single extra 0.001$ upvote )
So, if you are going to make a list of Top-Losers too - don't forget about me )
I had my doubts about it. Thank you for making this post, it cleared out many things for me.. :)
Great stuff furion! I will definitely vote at the 30 minute mark. I've been wondering how much of an effect promotion cost would have on a post. Some of these authors would have made loads without spending anything I think but some of the spending to earnings ratios are incredible. By the way, I shared part of my post's rewards with you tonight.
https://steemit.com/steemit/@kryptik/i-bet-you-ll-never-guess-what-i-did-with-my-saturday-night
Thanks for your support on so many of my posts! SteemOn.
Thank you. Sending out all the payouts on the iPad must have been super painful. Despite the amount, I am very grateful for the deed.
I'm just happy to have a SteemIt rockstar reading my posts. Thanks for all of the useful stats you grace this community with!
Very useful thanks. I did wonder, you have provided the evidence very neatly.
Much appreciate your analysis. At what amount spend on promotion is the return negative? Let's say a new user could afford to spend 5 SBD how good are the chances to have a return?
Enjoyed This
how did you enjoy it?
@cristi, you just made my day :)
too many trolls trying to get curation rewards with 0 contribution.
Great post, particularly like footer avatar, will most likely adopt this :)
These figures don't make sense to me; it says that I paid 97 sbd and earned 3.951.
I paid in the loose change I had kicking around in my wallet, which was less than a dollar.
Or am I just reading this wrong?
Cg
If you haven't paid that much, maybe someone paid for you. But the numbers seem to work out fine.
Thanks, but that was for @cryptovoices
So is the profit worked out from the time the boost is paid?
Cg
I just tried this feature by using USD1 to promote my article. Not much return so far
Fascinating analysis. You are a great asset to our community and I hope you keep posting, though I know you are very busy with other projects behind the scenes.
Would you please share your code for generating these charts and tables? It looks like you're using an IPython notebook?
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