Online Advertising Convergence

Peter Caputa says this: What's missing from ad networks like google and overture? The publisher has no say. Give them say." He had found this post: The Publisher/Advertiser/Audience Relationship where Steve from Think Tank 23 says this about a post by John Battelle:

Right off the bat, I think Battelle is off the mark in suggesting that an advertiser's fit with a publication's audience is somehow a function of the advertiser's relationship with the audience itself. Despite how many MBAs are earning their corporate tenure by spawning crap like that in industry journals, it's still crap. (No offense intended to you other, industrious, truth-speaking MBAs, of course.) The advertiser has a relationship with the publisher. The publisher has a relationship with the audience. It's the role of the publisher to mediate ("mediate"--look at the root) the relationship between the other two.

I've been "out" of the Internet ad biz for 3 1/2 years now and I have not opined publicly about the biz until now. Six years ago, I started an Internet ad business (network) focused on publishers. I was a web publisher with a family of community websites and needed ad revenue. I easily found thousands of other publishers with great affinity sites who would join in on my venture. I understood that publishers create an environment of content and community for web users, who consume content on those pages. Advertisers, usually agencies, represent companies who sell products or services. So, essentially there are four communities of stakeholders in delivering a successful ad impression. The (1)user, who chooses the (2)site he is visiting by an (3)agency who thinks a site is appropriate for a (4)company's advertisement for its product or service.

The keyword advertising programs such as AdSense or Overture replace the "site" for "keywords", removing the site publisher from the equation and taking the majority of the publisher's cut. I developed other selection criteria and network dynamics related to the user, such as geographical location or personal ad preferences in order to reach the millions of geographical advertisers represented by local newspapers and yellow pages.

Traditional advertising placement is driven by advertisers, because they have money. As content specific ad management technology is pushed down to the page level, and with XML and RSS we are almost there, there will be a trend towards specific advertising based on site content (the publisher has a say) down to the page, or article level. With aggregated news readers, P2P web applications, and profile "awareness" from programs such as Technorati, Blogger profiles, or social network software profiles, advertising convergence can reach all the way down to the user in a "smart" way.

The mistake that many of the Internet ad companies make is that they think that it is about the ad, site placement, or its technology. They are giving their client advertisers what they want, not what they need. When advertising is "chosen" and "allowed" by the users, such as in Google's new GMail service, we'll see a major reformation in the online advertising business. But I'm not holding my breath.