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As I see it, the problem is broader than content sites or publishers. It can be generalized to popular figures and social authorities who cause referrals by their actions or recommendations but aren't compensated. These can be popular tweeters like Ashton Kutcher, popular bloggers like Seth Godin, or popular journalists like Leo Laporte. The solution to the problem Chris Dixon mentioned should also be general enough to cover these other cases as well.
For many digital publishers, advertising has not been the major contributor to revenue for some time. I was surprised to hear from one B2B publisher recently that they have 7 ways of making revenue from visitors to their site and advertising was the least important. http://thebln.com/2009/10/why-free-is-no-big-de...
I think perhaps a solution is that merchants pay a much higher bounty to editorial sites when they do lead to direct sales, or there is a first cookie check alongside a last cookie to see what publisher first sparked the customers interest in their products. Every solution will have its pros and cons, but completely agree a solution must be found, or the web will become populated purely by comparison and cashback sites, and content sites will start to wither and die. No one wants that, surely.
I for one, would love to actively explore solutions - Chris, do you know if this is being looked at by PMA or other bodies?
Content is broken because when you start to actually have more and more data about likelyhood of buying, yet it still doesn't seem to equal actual buying all the time, it frustrates people about the meaning of branding on the web.
In some ways, I hate to break it to you all, branding on the web works fairly similarly to the way it did it print; You just have to deal with real time repercussions and user feedback, plus the possibility of inserting an ad that users perhaps want.
In other words, for the first time, you can do even more reflective mirrors of advertising. At some point though, you don't know how effective the ad is, because it is purely correlary. You can never fully defog the mirror that is brand and desire.
It's no easy problem. But additional measures from independent sources help us track historical patterns for an individual user. Their usage pattern is what counts, not the median of all users. Statistical clumping is part of the fog.
The solution is to build vertically focused platforms which are at the same time granular (many participants) and unified (far reaching). Targeted communications become possible, relevance rises across the landscape. Brands gain - they are able to pick the precise strata they wish to engage with, members gain - they are no longer bombarded with irrelevant rubbish from companies they're not interested in, the community gains - a profitable platform contributes all manner of value within the broader vertical.
The interactions can be tracked, measured and acted on if the platform owner has designed it from the ground up so as to make sure that the members' privacy is respected - gradula opt-in etc. this doesn't require any new technology. It requires a redesign of the thinking behind the platform and is a step or two beyond the currently fashionable social network.
It's a new way of doing things so what's needed is a change in thinking - ie. what's needed are more entrepreneurs. An example : as a photographer I mourn the passing of my profession as it has unfolded before our very eyes over the last ten years. As an entrepreneur, I rejoice in the fact that I can build a company which is an enabler (in the positive sense of the word :) for thousands of aspiring professionals who otherwise wouldn't get a look in. McLuhan was right about everybody being a publisher in the future (meaning now.) He should have gone further - everyone is now an entrepreneur. Actually, Drucker has said that everyone is a designer so that's not bad :)
Once the platform is built and the environment designed so as to create value for all the actors, the rules of the game change and content creators all of a sudden participate in the earning, albeit at various points in the long tail.
I'll ping you a Tweet about this - I'd love to get your take on the idea.
I'd like to add the horizontal value of social media into an opt in advertising system. Let the tools I use to share and communicate benefit both serendipitous search for me, and relevant offerings from advertisers. Check http://victusmedia.com for some examples we're building.
If users are authenticated while viewing content, it would be possible to build a rich profile of user intent, interests, and preferences. This interest/intent profile could then be used to deliver highly targeted ads.
If the user's profile can be used across sites, then a very rich, cross-site profile could be collected. .
I think you've nailed a key point in this discussion. The buy side has access to a significant amount more data about the halo effect of various media types. But there is no short term incentive for them to work with publishers when last click metrics allow them to be aggressive in negotiations and hold their hands up when asked about the holistic impact of a campaign. I've been on both the buy and sell side of the business and until both sides have more common ground, the industry will have a difficult time solving for this.
Furthermore, when you use specific and identifiable ad copy in print\tv\banners etc.. then use them in SEM to track and bring accountability to those advertising methods, you further track the efficiency of those channels you could not otherwise attribute with sales in the past.
I agree this needs to get fixed, but the problem is within the execution, buying, and ultimate business intelligence of the advertising that takes place. Last years campaign metrics have a place in this years planning - but you it is hard to convince 25 years of ad agency businesses that this is true.
That said, there are signs that things are changing. While most big agencies have silos, Havas manages them together. Similarly, folks like Matt Greitzer at Razorfish are bringing search expertise to the emerging ad exchange buying practices. There is too much money being left on the table through the siloed approach. The agencies will either evolve or clients will find new agencies.
Chris - thanks for the shout-out & another interesting post! Have been chewing on the first one for a few days now...
It seems like, privacy implications notwithstanding, the same technology (that may or may not have ever been developed, I haven't heard much since I read that article a year or two ago) could be used to track content's role in building purchase intent.
Great post.
Why? Sales guys don't make anything (they don't "generate intent") and they are generally have no say in the product decisions that ultimately lead to profitability. But because they go out there and actually capture whatever willingness to buy is around a given product or set of products ("harvest intent") they are compensated substantially.
Ultimately, a similar dynamic is at play here - content sites may give me the data, expert commentary or backup I need to make a purchase, but the aggregator who puts me into the sales funnel will capture more of the economic bounty associated with my purchase.
Essentially all Internet problems flow from that single reality of worthless content, when aggregation is more profitable (naturally) compared to generation. Solve this fundamental problem and the rest is commentary. And yes content should not be valued by the clicks.
Instead of buying difficult-to-deliver intent from media companies, the vendors themselves are doing the intent generation. See here: http://ow.ly/rBhl http://ow.ly/rBiw http://ow.ly/rBjk
This leaves media companies w/o much of a business model, but that's the world we live in.
In fact, you're saying that it's the content.
In that case, I think you're exactly right. Media sites have no good way to harvest the intent they generate through their content. I don't think media co's will ever find a robust solution to this problem. I think the only folks who can harvest the type of intent generation you're talking about are the vendors themselves -- which is why it increasingly makes sense for the vendors to publish the content.
(full disclosure, I'm a springpad co-founder that's powering the capability)
You are exactly correct with this observation. The track-ability of each and every interaction with a page or ad unit has rewarded marketers with an "easy" way to measure and show results, and diminished the value of the other effects of a digital campaign.
The other effects of a digital campaign, that ones that can't be measured have value. Some people (myself included) think that there is more value in what hasn't been measured. Without an "easy" way to calculate that value, marketers (who control the digital media spending) will continue to spend accordingly.
That is the world that we live in...right or wrong...
I have a very different view on the issue but tend to agree with Rick Burnes.
The vendors are becoming the main content generators and site advertising is dying. The content is the ad and people are growing less tolerant of anything extraneous.
The marketing folks will hopefully realize they need to start making the news and stop simply riding it. Gone are the days of the quick win.
Thanks for a great post.
Cheers,
Jon
@fogcitymedia
A transparent protocol must be communally accepted to allow transparent and equitable utility of intent driven data.
Great idea.
1. Video is not good for display advertising - http://www.yanivnizan.com/2009/08/why-online-vi...
2. Video is perfect for performance advertising - http://www.yanivnizan.com/2009/10/why-online-vi...
We are challenged as curators, content generators, information specialists, and entrepreneurs to create a system which optimally and fairly rewards value creation. An unbiased editorial review is worth so much more to a rational reader than a shill. But how can we best construct an information trail that connects that content generator to the action of a purchase?
Advanced tracking tools that allow browsers to remember a users history across systems would enable a user to select a source that most influenced their buying decision. But even this questionable spy network requires conscious recognition of motive forces.
My latest project has some relation to this problem as it connects a users actively shared social communication to personalized ads. At least a content generator could host an ad widget like this and allow for the connection between interest and purchase action on their site. This doesn't help down the road purchase actions.
How can we socially support unmonetized editorials/reviews to enable this valuable service. Micro payments could cover the cost of an opinion independent of marketing. But somewhere along the information value curve we as users have to either pay this cost, or accept product shifted opinions.
ps: the comments to this post are incredible, marking off time to review them later.
I'd like to throw a fascinating tangent into the conversation - a recent Cornell study called 'Meme-tracking and the Dynamics of the News Cycle'
http://www.cs.cornell.edu/home/kleinber/kdd09-q...
Can't help thinking there's a content attribution/monitization system somewhere in here.