January 13th, 2006
Big Advertisers Don’t Want an Open Web
Here’s another reason why the blogosphere’s vision of the web as an open marketplace likely won’t come to pass: the BIG advertisers won’t finance it.
Let’s face it, the Googlenomics revolution has been financed by the little guys, who have profitably grown their businesses with pay-per-click ads. For small companies, brand management is secondary to driving sales. Not so for the big, bad corporate advertisers.
There’s a reason why Google bought a stake in AOL. From OnlineMediaDaily, we learn:
Mike Kelly, president of AOL Media Networks, told OnlineMediaDaily that one of the main benefits of the company’s new arrangement with Google is that AOL’s sales staff now will be able to offer clients the ability to buy search ads just on AOL properties.
Some search engine marketing executives say that the ability to ensure that pay-per-click ads are displayed on specific properties will encourage large marketers to spend more on search.
“It’s definitely a plus for marketers to have the flexibility to buy on AOL alone,” said Joshua Stylman, managing partner at Reprise Media.
Gregg Stewart, senior vice president, channel management and marketing at Fathom Online, agreed. “Marketers will always want to go for precision if given the opportunity.”
What’s more, Stylman added, many marketers think AOL has “cleaner” traffic than other networks; AOL’s subscriber-only past has created at least the perception that the network reaches real people, as opposed to bots or spammers. But, he added, marketers would do well to test their campaigns and determine which properties yield the better results. Not all campaigns will do better on AOL, said Stylman, adding that some marketers will have better results on Google’s network.
Big advertisers have been around a long time and know better than to practice unsafe advertising — and to put themselves at the mercy of click fraud (although they do buy TV advertising, so they’re not always geniuses of accountability).
Keep in mind why communism is flawed in theory — people (media consumers) don’t want total control, and those in power (big advertisers) don’t want to lose control.
As technology unravels old media business models, the result won’t be a completely open marketplace. A handful of brands will still dominate — those that people trust.
Welcome to the trust economy.
Topics: AOL | Google | Online Advertising | Publishing 2.0 | Technology
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Just found this (quite new I think) blog called Publishing 2.0 … check out thisnice and brief note re the advertising explosion (or is that implosion?). Here’s another reason why the blogosphere’s vision of the web as an open marketplace likely won’t come to pass: the BIG advertisers won’t finance it.
[…] Episodes of ABC series “Lost” and “Desperate Housewives,” available on a day-after-broadcast basis from Apple’s iTunes for $1.99, generate 55 cents for Apple and pass the remaining $1.44 to the network. Apple earns less than double for a video download of those two top-rated shows than it does from a song sold on iTunes, Hollywood Reporter said in an article. Where Apple’s music take is about 29 or 30 cents per song from a major label, it gets 55 cents from videos. Those cuts probably increase for content from providers who don’t occupy the top tier of the entertainment industry. But that $1.44 is important. The article noted how even at a “worst-case scenario” - where 20 percent of the viewing audience buys downloads instead of watching episodes on TV - generates an extra $15 million in revenue for the network. A JPMorgan Chase analyst, Spencer Wang, commented in the report how that $1.44 exceeds the “estimated 57 cents in advertising revenue per user generated under the current model.” Nielsen analyst Larry Gerbrandt was also cited on his analysis that states content owners make about as much from downloads as they do from DVD boxed sets. The Internet-delivered model received focus from Hollywood Reporter due to its impact on traditional advertising. Google and the rest of the online advertising industry have eaten up a lot of the profits that Old Media used to collect. Columnist Diane Mermigas summarized the conflict in her article: Traditional media companies have an indisputable expertise in content production and solid touch-points with consumers and advertisers, just as new-media players have the high-tech flexibility and savvy to respond to emerging competitive challenges and opportunities. In the end, it all comes down to what it’s worth to the media players involved, as well as to consumers and advertisers. Meanwhile, Atlantic Media’s Scott Karp posted how trust issues figure in the advertising future: As technology unravels old media business models, the result won’t be a completely open marketplace. A handful of brands will still dominate - those that people trust. — document.write(”Email WebProNews here.”) Drag this to your Bookmarks. Add to document.write(”Del.icio.us”) | DiggThis | Yahoo My Web Receive Our Daily Email of Breaking eBusiness News About the Author: David Utter is a staff writer for WebProNews covering technology and business. More top_news_top_news Articles Contact WebProNews […]