Online Advertising and the New Business Model, Revenue Model Paradigm Thingy


I enjoyed this column by Bill Thompson on the BBC News web-site because it questions, and begins to through a bit of light on something with which I’ve been puzzling for some time.  If increasingly clever on-line advertising is going to fund so much of the web and software in general in the future (and of course, it’s a model which is serving Google exceedingly well at the moment), why do my friends and I so seldom actually click on an ad?  On most sites, I am pretty well blind to, or at best irritated by, banner ads; my pop-up blocker does a pretty good job of eliminating unwanted interruptions and I never click the Sponsored Links when I do a Windows Live or Google search.

I’m not sure what the answer is.  Web metrics and measurement are far from perfect but they are still many, many times more telling than comparative measures available for broadcast or print media.  Advertisers are not daft – although I’m sure they suffer as badly as others from the herd instinct – so they must be able to demonstrate some form of return.  Perhaps it’s just that the marginally more demonstrable returns from online are sucking dollars out of the scatter-gun approach of press advertising.  As they say, in the Kingdom of the Blind, the One-Eyed Man is King.


0.02c. The Gmen simply did that ‘market making’ thing all great (lucky?) companies do at their birth: they made the pie 100x larger and enact a modest transaction tax. And yes, there were precursors to the Larry,Sergei and Eric, but not really. Prior to online/digital advertising, and in particular ‘search based advertising’, the whole concept of ADVERTISING was for the well-endowed, large-enterprise, agency-using, brand-toting, purchaser. Think FMCG company or Automotive manufacturer. Their sales were, and remain, significantly dependent on marketing-generated (where marketing = ad.campaign) leads.
As you are reading Anderson’s ‘Long Tail’, think about this: search based advertising is exactly the tool, or can opener, that made a market out of this whole long tail of global search detritus.  If a 100 producers of coloured-beads-on-a-string can now ‘advertise’ and sell their wares to anyone, anywhere, where UPS or Fedex can reach, and that ‘advertising’ only costs me $25.00.  Game on. And if a 1,000,000 small businesses (consumers and producers) can do it…game really on.
Perverse Corollary:  Is this market-making breakthrough of search-based advertising (plus the networks of sellers, re-sellers, after-sellers, aggregators, hangers-on and digital leech-crafters) is in its essence something that is ANTI-BRAND?  Are we watching now a micro-SMB business model par excellence swimming back upstream to try it’s hand in the world of the One-Eyed global BRAND. Maybe. Not sure. Just maybe. You are right to say that the jury is still out on that point.  In the meantime, I would venture that neither you nor I will in fact hang around for that Dodge 4×4 trailer to play before we consume the video clip of our favourite band, from that no-name digital vdeo juke box in the cloud.

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