StumbleUpon is Falling Down

Don’t get me wrong – I’ve had fun whittling away time playing with StumbleUpon and I’ve met at least one CEO who credits them with spring-boarding her company to the big time. I don’t hate them; I just think their business modeled is doomed. And besides, haven’t we already tried this before?

Here are five reasons why StumbleUpon is doomed to fail:

1. The traffic they send is pretty worthless. We’ve gotten over 32,000 visitors from StumbleUpon in the past six months to a variety of sites. Zero ad clicks, Zero sales, Zero dollars. These lookie loos don’t even browse around, as just 0.64% click to a second page!
   
2. Traffic is too expensive. Campaigns start a nickel per visitor, which equates to a $50 CPM. For a penny or two more, you can get much more highly targeted visitors (who actually convert) via paid search. There are plenty of other sources that will deliver the same quality of traffic for 80% - 90% less, too.
   
3. Ad buys have a very looooong tail. Two weeks ago, we bought a $50 test campaign from StumbleUpon, which was supposed to send 250 visitors per day our way over a four day period. During the course of that campaign, over 30 of those paid visitors gave us thumbs up. Because of that, we’re now receiving an average of 350 organic visitors per day since the campaign ended. Paid StumbleUpon campaigns seem to be a good way to prime the pump, but there is no reason to keep spending once the site has been rated.
   
4. Cheating is easy. People are openly trading stumbles on DigitalPoint, which may actually even be within StumbleUpon’s terms of service. Meanwhile, organized cheat sites like StumbleXchange are growing like crazy.
5. They lack polish. No credit cards accepted, no ability to generate meaningful reports, no conversion tracking and an opaque and confusing ad approval process. They fall way short of the minimum acceptable functionaility that advertisers expect.

There may be another method for StumbleUpon to monetize its popularity (interstitials?), but their current business strategy seems doomed to fail.