5 comments

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  Jason

  11 months ago

  I think the model will last. With few exceptions, consumers don't want to pay for content--not just on the internet, but also on other platforms such as mobile phones. Companies that can figure out ways to offer ad-supported content and services will continue to be successful.
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  mehdi

  11 months ago

  Generating quality content is very expensive. Also, content distributers can easily take it away. This is Google News is doing to New Times or AP. It's been a losing game for quality content generators. The ones which are successful are usually the ones who have spinned off other side businesses using their brand.
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  Clarence Wooten

  11 months ago

  Very interesting post. Many have asked themselves that question. Specifically, east coast investors who have been weary of pure ad supported business models since the dot com crash in the early 2000s.
  
  I think ad supported models will last. However, I think performance will be the determining factor. Social networks like MySpace has certainly proven that ad performance is largely situational. In a MySpace like environment, ads are largely ignored. Creative page variations are huge distractions.
  
  In other environments, LinkedIn for example, ads are considered premium. LinkedIn's recent report that they are generating CPMs as large as $75 is a great example. Quality, targeted ways to reach premium highly sought after individuals such as baby-boomers and generation Xers will continue to dive advertisers to spend money. Outside of search, Internet advertising will become more and more about brand impressions vs. clicks. Broadband proliferation has created better opportunities for video and rich-media ads.
  
  It is clear that attention has clearly shifted to the Internet. In a world where content has become plentiful, context is now King! Content without context yields low CPMs and every lower CPCs. Platforms that target and focus on both, will always be sought after.
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  Matthew Brown

  11 months ago

  I agree with Clarence Wooten, I see advertising on mainstream social networks (Facebook and Myspace) working better for branding than advertising. It's like this, you're at the county fair and ya get thirsty. What's going to pursuade you to one drink over another? A passive Budwiser banner or someone interrupting you and your friends ever five minutes trying to sell you a Budwiser? The hard sell is going to drive you to Schlitz just to scorn the people at Inbev. Sns are like a fair. It's a fun place to go where you can spend time with your people in your network. Intrusions aren't welcome. Billboards aren't either but they are tolerated.
  
  I think marketers need to understand that and make their plans accordingly: paid search is for lead generation, sns are for branding. Attempting to use sns for lead generation might even have negative branding effects (see Schlitz). We'll see how this pans out in two to four years.
  
  Btw, I drink neither.
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  Mark Wahlstrom

  11 months ago

  This is a very interesting and thought provoking post. I particularly agree with Clarence's idea that content with out context is going to be severely devalued in the coming months and years.
  
  What I believe, and in fact am betting on, is that a start up that can combine unique, quality content inside a very specific context or social network will have substantial value to advertisers. Basically, if there is appropriate context, i.e. a social network of tightly defined high net worth or demographically desirable people, and in that context there is top quality content, you will get the higher CPM that investors are looking for.
  
  Advertising is always going to have a place, but I agree, the ocean is now so vast that unless the content is placed in context it's value is only going to decrease.
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