The last few days have seen a lot of muttering about Bill Gates' announced intentions to put a new twist into the dynamics of online advertising. Nicholas Carr (via Doc's blog) addresses this issue in his post Buying Eyeballs :


What Gates is saying - and it will not be music to Google's ears - is that there's too much profit right now in online advertising.


Google essentially holds a monopoly at the moment ... particularly when it comes to placing advertising on blogs. But there is an interesting element to this game, which is that the publishers are individuals, do-it-yourselfer's ... and it's not too hard to imagine that if someone gives do-it-yourselfer's an easy and versatile way to use advertising (and, incidentally, help advertising move away from being *intrusive billboards* as much as possible), they'll find ways to use that capability.

The personal publishers are becoming customers for the advertisers, and the advertising suppliers ... just as newspapers and magazines did and it's likely that their needs will be more varied, and often more rigorously defined, over time, than those of newspapers and magazines.

Think, for a moment, of newspapers and magazines as the publishing industry's version of mass production ... and just as many other areas of enterprise are being atomized and impacted by mass customization, so too in the online new media arena.

Bloggers represent the mass customization of the news and information business .. and we know that more and more people are surfing, link-by-link, through blogs and constructing their own tapestires of meaning about issues in the news. The readers are driving this in synch with personal publishers.

Give personal publishers the means, and the supporting raw material (comprehensive and well-defined inventory, less intrusive formats, ways to *pay* for clicking through such as receiving discounts if completing a transaction after clicking on an ad) and they will use it, and introduce further efficiencies into the online advertising business.

This is our quest here at Qumana ... the tool to publish, and use advertising at a granular level if so desired, is free. The second part of this equation is for us to work with advertising suppliers to help them understand, and respond to, these changing market dynamics .. finding ways to re-distribute the proportions of the advertising dollar. This will, I think, redefine Google's margins, as more and more personal publishers realize that they are providing Google with significant margins.

If legitimate alternatives arise, why wouldn't they be used ? And while I am on that subject, i have never understood quite how Google can justify *exclusivity* (their Terms of Service) when it comes to the advertising a personal publisher places on her or his site. Ifthat isn't *owning your content*, I don't know what is.

Doc's post explores the implications for the online advertising industry, and Google. Two-thirds of the way through his post, he focuses on the core issue, quoting Nick again:


Nick continues,

The online ad market is going to become more efficient. Much of the profit that now goes to the operators of the ad-serving technology will be redistributed. Some will go to the advertisers, in the form of lower rates, and some will go to the publishers, in the form of higher commissions. And if Gates is serious - and I'm betting he is - some will go to the internet users themselves, whose clicks, after all, make the whole system work. In the battle for eyeballs, bribery can be a powerful weapon.


Doc then says:


Bull's eye. That's the shift that matters. Inefficiency has always been the Achilles heel of advertising. Google has taken advantage of that in a huge way. Kudos for that are well deserved. But better advertising isn't enough. We need to go beyond advertising altogether. We can't keep thinking of markets as containers of fish (excuse me, "consumers") in barrels, and rooting for the builder with the biggest barrels the most captive fish.


He suggest, in building towards a conclusion, that:


Advertising through Google is far more efficient, and infinitely more accountable, than it ever was through TV, radio, or even newspapers and magazines. But it's still the billboard business.

Even if the ads are tiny blocks of text inserted in blogs and searches — and even if they're personalized and appropriate for the eyeballs exposed to them, they're still billboards. They're still intrusive. And they're still coming from one of very few sources that don't have much competition. Yet.

The day will come when the individual's reach exceeds the marketer's grasp. That's when we'll have real markets again. Symmetrical ones, where buyers and sellers reap the benefits of vast new grounds where inhabitants thrive on independence rather than captivity.


I think that's the opportunity here. Readers' interests are served by a personal publisher's ideas, style, personality and care ... for the issues and for their audiences' attention. If these publishers can use advertising that complements the publisher's ideas, style, personality and care and is pertinent or useful to readers (not always, but more often than now), then publishers WILL take more care with how they pull-and-place advertising, and what kinds of advertising they pull and place.

And if we assume that online advertising is here to stay, raising the bar in this way is on balance a good thing. It's what we are trying to do with the tool and services we are offering. Help us do it.


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