economy
Update:I re-read Scott’s post and think I may have mis-interpreted it. I think he is saying the flaw is in the way the ads are sold, not online advertising itself, to which I agree. (Could be the Black and Tans. I’m Italian, but my mom says we are all Irish on St. Patrick’s, so I have a Guiness and some Corned Beef to celebrate too.)
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I’m usually on the same page as Scott Karp, but not today.
Maybe it’s because I’m snowed in and it’s St.Patrick’s (Black and Tans), but what he calls a flaw of online adverting, I call a fix to a flaw of traditional advertising.
First of all, it’s not only Yahoo and the big boys getting premium rates for page views. As the producer of a couple local newspaper websites, I can say that our page-views are worth much more than $1 per a thousand.
It’s true that national advertiser can sometimes get that CPM, but it more like $4 to $18 per CPM and that doesn’t include the text ads we have on the page. Nor does it take into account that each page-view serves 2- 4 display ad impressions. And some pages are sponsored also.
All in all, I’d estimate that our cost per reach is lower than our in-print advertiser cost per reach, but not that much lower.
The fact is, I don’t think either rate is as valuable as the cost, so we are in agreement that pay-per-click is bringing down the the total value of a page view.
But that’s exactly what we want, as an industry. Wha?
Like Scott says, it’s about knowing who your users are. The value of an ad is in what value it delivers to the advertiser, not in what perceived value any salesperson can convince the advertiser that a particular buy has.
And, like I’m sure Scott knows, the internet is best at bringing the margin between cost and value together, to zero in some cases.
It’s not a flaw, it’s a virtue.
I guess that means that high traffic does not equal a business model. Popularity is not enough, though huge popularity is still enough for the time being.
I think that’s just because we are in the huge transition. We now value things by the old model, “perceived and estimated value.” We soon will value them by the new model, “true value.”
That’s where Doc’s VRM will play a large role, as well as gestures and intention.
I see VC’s as the ones placing faith in page-views, moreso than web 2.0 companies. Most Alot of them are aiming right, I think.
Who can’t resist the allure of high traffic, though.
Ed Batista discusses successful relationships as put forth by John Gottman.
As I read what it takes to form a successful marriage, I couldn’t help but think that VRM and CRM need to embrace these same ideals.
This one really pops:
7. The creation of shared meaning.
In this age of empowerment, and in the same way that the Media must join the conversation, the vendors must join the bazaar.
A lot of talk lately about how page-views are dead.
Greg Yardley suggests a solution but it looks like he’s missing an important point.
It’s not just about widgets and “share” of the page, it’s the fact that a well-built Ajax application may now substitute a rich interface for what was tens or hundreds of page requests.
So now how do you calculate a CPM? By the number of clicks on a page? (I guess Ajax will report this data back to the server)
Are advertisers going to buy into the fact that a click that delivers new data to the page makes their ad on that page worth two impressions? Doubtful.
Do we need advertising engines that deliver ads in time based or action-based way so that one HTTP request can deliver more than one ad if the user is interacting with the page for an extended period? Maybe.
Or do we need to rethink advertising in general and admit that interruption based advertising is dead in general? I’d say so.
Which is why pay-per-click is so popular and why pay-per-action will continue to grow. No doubt.
By the way, it’s not just Ajax that’s causing this death of the page-view. It’s widgets, as Greg suggests, and RSS, and syndication of other sorts that make modern web marketing almost impossible to track effectively.
What can be tracked, as always, is the effectiveness of a campaign ROI, which methods like pay-per-action help immensely.
So what’s left to do in a pay-per-action world? Attention, Gestures and Intention are the gold that needs to be mined in order to create more effective marketing.
Using that gold will help us direct relevant offers to willing individuals. What could be better than that?
We can’t do it alone. CPM is one-way marketing, and one-way is dead in all things web.
That’s where VRM comes along. It stands for Vendor Relationship Management, and it refers to a new generation of tools on the way that allow the customers to assist in the marketing relationship.
Some will resist this loss of control at first, because what’s better for the customer doesn’t seem to equate to better for the vendor. But that’s wrong because the marketplace is not an equation, it’s a relationship.
A marriage doesn’t only get better for one of the spouses as the relationship grows stronger. It gets better for both.
Page views aren’t so dead as CPM is. Long live VRM.
Great post from Chris Anderson about the Economics of Abundance.
More evidence of the commoditization of everything. Technology and Media are just not valuable in the same old way.
If Barry Diller gets it, maybe the tide is shifting for Old Media companies. Perhaps the Old Media Doom sday clock will click back a minute or two.
Still, there are many people in these companies who are calling the shots who will not be able to break out of the mold. These types have such a great fear of failure, that they just can’t adjust to the methodology of “failing your way to success” which is necessary in this user-centric world.
The Old Media Doomsday Clock has been moved forward from eight minutes to midnight to six minutes to midnight.
I’m hoping part two of the latest Gillmor Gang will prove more interesting.
If you remember the Jason and the Argonauts tale, you might know how Jason succeeded in conquest over the Seed men by casting a stone at one, who thought it was his neighbor, and letting them all kill each other.
That’s what Steve Gillmor seems to do by letting the fellas discuss the importance of Google algorithms and whether site owners can get a cut by having search engines bid for their site search.
If Steve would have put the “knockoff” Cheerios down for a sec I know what he would have said.
It’s not whether Google’s algorithms hold up, it’s whether they can garner more stock in the conversation with all their attention data.
The winners of the future are not the best technologies. We’ll all be able to plug into those the same way we plug into an electrical outlet.
The winners are the services which add value to the conversations happening throughout distributed web networks.
These networks and conversations are fluid and changing constantly in response to our gestures.
Those who don’t get this are either thinking too hard or just not enough.
In a similar way that facial and hand gestures are a meaningful supplement to spoken conversations, the gestures which we talk about with attention are the metadata of the conversations happening on the web.
That equates to economic power because markets are conversations.
I agree with Jason Calacanis that many in the SEO business are trying to game this system, but I disagree when he says the system works. People are trying to game the system because it does not work. It just works better than the previous systems.
I can prove it Jason. I’ll write a better piece on a new cell phone than Engadget and see which shows up higher on Google.
No. Those dynamics are only part of the game.
The richer system envelops us with answers using our data and our network’s data in a chameleon like fashion, never static like Google. That’s child’s play.
Jason(Argonaut) succeeded in getting the Golden Fleece but was fickle and left Medea for another Princess.
Likewise, in the shorter term companies may succeed by amassing link attention.
The true winners won’t be seeking the Golden Fleece at all. They will be removing the barriers and letting the crystal waters flow in, filtered and clean, Pure Conversation.
The Human Rights Amnesty report claims the war on terror is draining attention from other issues.
Perhaps the governments of the world need to join GestureBank. They gotta be in it to win it.
Then, apply a filter based upon the anonymous pool of attention metadata and figure this all out.
There are some important discussions happening this week about open formats for attention metadata.
ET better phone home because the clock is ticking on everybuddy. The “Duh” Vinci code is unraveling.
I’m closing comments soon. My contact info is mobile:203.219.5159 email:mattatglistndotcom IM:mterenzio@gmail
Dear everybuddy,
When I got home from Syndicate, I had an email from Adam Green. He wanted me to help out with a session at OPML Camp about the relationship between OPML and Attention.
So I’ve been thinking even more about Attention.
If you’ve read this blog, you know those two topics are pretty big for me, but this blog is really about conversations.
And I think I’ve done a good enough job making my point (at least to myself) about the importance of conversations in the new economy.
Now I must move on and tackle a related but different subject.
I’ll continue to post during OPML Camp here, and then I’ll wrap things up.
Not sure of the name of my new blog or where it will be, but I have a few ideas.
If links weren’t dead, I’d have to thank Dave Winer for the biggest traffic day, when he pointed to a one minute snowstorm movie. (step aside RocketBoom)
Thanks to all who participated here, especially James Corbett, Alex Barnett and Danny Ayers.
I’m sure the conversations will continue when you find my new home.
Sincerely,
everybuddy.org
P.S. The Old Media Doomsday Clock will continue to be active.
Speaking of Gestures, I can’t say I totally have Steve Gillmor’s point absorbed. I’m not going to link anyway.
But my take is this.
Using links as a basis for extracting economics from citation is corruptible. Using gestures is not.
Put another way, you can’t fake attention. Furthermore, links are only one cog in the wheel of attention-share. Link data is meaningful only in relation to surrounding data, including and perhaps most importantly gestures and intention.
I thought the recent IT Conversations with Jonathan Schwartz and Doc Searls was interesting. One thing Jonathan said, that “the consumer always wins” made me think, especially since I don’t always feel, as a consumer that I always win, and certainly not in the short run.
For example, I hate my mobile provider and even my ISP, and for now I don’t think I can do much better.
What I think is true about is statement is the flip side.
“The company that does not cater to the consumer always loses.”
If a feature, price, or product is available and desired, you will lose customers if you don’t provide it.
Sounds simple enough, yet the recording industry and the old media companies have proven it’s not necessarily a “no brainer”.
Apr 26 2006 01:43 pm |
economy and
searls and
schwartz |
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