Continuations: ad:tech Panel On State of Digital Economy
kidmercury
· 1 month ago
we need to redefine what the term advertising means. for instance, this blog post is an ad for ad:tech. your entire blog is an ad for USV. this comment is an ad for me. (and 9/11 truth, of course!)
albert
· 1 month ago
That was one of my main points on the panel today.
David Semeria
· 1 month ago
Great points Albert. So how do you see this affecting web monetization models?
albert
· 1 month ago
I wish I knew the answer to this! I am not even sure yet which of these two things is actually happening.
David Semeria
· 1 month ago
Does it really make much difference which is to blame? The key point is that it's going to be increasingly difficult to rely on advertising as the principle revenue stream going forward, no?
albert
· 1 month ago
As a generalization / in the aggregate that may be true, but I think there will be very different specific opportunities depending on what is really happening.
kidmercury
· 1 month ago
my take: more affiliate revenue models; decrease in CPM/CPC pricing models; more ad networks that create content (i would expect these to be niche ad networks with significant scalability challenges, although i don't necessarily see that as a problem for anyone), more ecommerce.
David Semeria
· 1 month ago
Hi Kid.
I've lately been thinking a lot about web monetization.
When I worked in the public equity markets, I witnessed the tail-end of the emergence of something quite strange. People started taking volatility, which is an *effect* of trading activity, and began trading it. People built profitable businesses from the buying and selling of something which before they hadn't even considered tradable. If you had suggested this to people in the sixties and early seventies, they would have laughed at you.
I get a similar reaction when I suggest that in the future the new internet currency will be usage. I see both a wholesale and a retail market for usage, with the service provider acting just like a standard retailer.
Hence a website can 'buy' usage for applications, content, hosting services, etc - perhaps do some repackaging/branding etc - and then sell the usage on to the end user.
Are you laughing?
kidmercury
· 1 month ago
when you say usage, you mean like i have 10 GB of bandwidth from my host, and i can use this as a currency -- i.e. sell the bandwidth usage to someone?
i think usage as a currency is very real, so i can't laugh at it -- i'm a believer! there are forces at work that are trying to get carbon credits as a currency, which is another usage concept -- i.e. i could sell you 10 carbon credits so you have the right to breathe....or perhaps if a person wants to have more kids (who will emit CO2 when they breathe) they will need to buy more usage credits
David Semeria
· 1 month ago
Usage can apply to anything. Hosting services, an email application, media content.
You host a service (perhaps made up of all of the above) and charge users $10 for, say, 1000 accesses. You then pay the ultimate content/service providers, say, $5/1000.
And pocket the difference.
kidmercury
· 1 month ago
yes. i love the concept of usage currencies, i think we'll see more of it to come. my favorite example is airline miles, which i think would be a great usage currency to trade.
LukeG
· 1 month ago
Super interesting questions. It seems like the massive ad market fragmentation driven by web penetration, UGC tools, and user comfort with the distributed web led to some pretty huge inefficiencies in the ad markets. In the last decade we've seen the ad network bubble, leading to aggregators and networks rolling up networks ^n, accompanied by the continued shift of risk from advertisers to publishers as better measurement tools and capabilities facilitate the slow (in web time) transition to pay for performance advertising (from CPM to CPA).
At the same time the massive adoption of online social networks and the rise of the "social web" (excuse me) has changed the way we as consumers share information/news/preferences/recommendations.
The first part of this shift should definitely lead to a more efficient advertising economy. Your two completely opposite options may not be mutually exclusive, though. Better measurement tools let us cut out insufficient-ROI ad channels, and more efficient advertising obviously gives us more bang for our buck. But I guess I'd expect that these efficiencies wouldn't outweigh the growth in customer acquisition dollars that should accompany *a growing economy.*
The second part of this - how the socialization of web behavior will affect the ad markets - is pretty fascinating. Other than a sense that there may be a natural dichotomy between consumer and enterprise marketing here (I'm going to listen to & recommend things to my friends but never let you "advertise" to them through me), I have no idea what this looks like yet. Should be fun.
All Comments
I've lately been thinking a lot about web monetization.
When I worked in the public equity markets, I witnessed the tail-end of the emergence of something quite strange. People started taking volatility, which is an *effect* of trading activity, and began trading it. People built profitable businesses from the buying and selling of something which before they hadn't even considered tradable. If you had suggested this to people in the sixties and early seventies, they would have laughed at you.
I get a similar reaction when I suggest that in the future the new internet currency will be usage. I see both a wholesale and a retail market for usage, with the service provider acting just like a standard retailer.
Hence a website can 'buy' usage for applications, content, hosting services, etc - perhaps do some repackaging/branding etc - and then sell the usage on to the end user.
Are you laughing?
i think usage as a currency is very real, so i can't laugh at it -- i'm a believer! there are forces at work that are trying to get carbon credits as a currency, which is another usage concept -- i.e. i could sell you 10 carbon credits so you have the right to breathe....or perhaps if a person wants to have more kids (who will emit CO2 when they breathe) they will need to buy more usage credits
You host a service (perhaps made up of all of the above) and charge users $10 for, say, 1000 accesses. You then pay the ultimate content/service providers, say, $5/1000.
And pocket the difference.
At the same time the massive adoption of online social networks and the rise of the "social web" (excuse me) has changed the way we as consumers share information/news/preferences/recommendations.
The first part of this shift should definitely lead to a more efficient advertising economy. Your two completely opposite options may not be mutually exclusive, though. Better measurement tools let us cut out insufficient-ROI ad channels, and more efficient advertising obviously gives us more bang for our buck. But I guess I'd expect that these efficiencies wouldn't outweigh the growth in customer acquisition dollars that should accompany *a growing economy.*
The second part of this - how the socialization of web behavior will affect the ad markets - is pretty fascinating. Other than a sense that there may be a natural dichotomy between consumer and enterprise marketing here (I'm going to listen to & recommend things to my friends but never let you "advertise" to them through me), I have no idea what this looks like yet. Should be fun.