Friday, April 29, 2005

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Some changes a comin' on Internet ads

The Economist has an interesting story on how the evolution of Internet advertising. Here's how it opens:

This year the combined advertising revenues of Google and Yahoo! will rival the combined prime-time ad revenues of America’s three big television networks, ABC, CBS and NBC, predicts Advertising Age. It will, says the trade magazine, represent a “watershed moment” in the evolution of the internet as an advertising medium. A 30-second prime-time TV ad was once considered the most effective—and the most expensive—form of advertising. But that was before the internet got going. And this week online advertising made another leap forward.

This latest innovation comes from Google, which has begun testing a new auction-based service for display advertising. Both Google and Yahoo! make most of their money from advertising. Auctioning keyword search-terms, which deliver sponsored links to advertisers’ websites, has proved to be particularly lucrative. And advertisers like paid-search because, unlike TV, they only pay for results: they are charged when someone clicks on one of their links.

Read the whole thing to see how Google is revamping its AdSense feature.

This segues nicely into a Mickey Kaus report on a potential change in how ads will be gathered on the blogosphere:

Roger L. Simon and Marc Danziger announced the formation of a new network of bloggers, including some big ones (e.g. Instapundit). They want Lexus ads! And they claim to have the unique eyeballs and high-end demographics necessary to get them. ... This is a potentially big deal....

L.A. Voice provides more details:

Simon and Danziger have formed "Pajamas Media," an effort to lay some serious pipe to help the blogging community sell ads en masse to big clients like GM and Amex and ultimately, help the partnership earn enough money to fund a global network of paid newsbloggers - a sort of new-age Associated Press.

Danziger (a new-media architect from way back) is working on step one - the development of mechanisms for distributing big-ticket ads to hundreds of participating blogs so that advertisers can reach the blogs' cumulative millions of daily unique users. Meanwhile, Simon dreams of tying together bloggers in every corner of the globe whose local savvy and grasp of the language and politics of their regions will basically beat the holy hell out of any foreign correspondents.

Both say they want to beat the [L.A.] Times.

Danziger's plan is a good one, provided he can get a solid sales force and reliable tech: it was only a matter of time before someone began to actually build what the blogosphere's been projecting and dreaming of for several years now - a fat pipe for ad money. The ad market is poised to tap into the smart, passionate and micro-targetable audiences of blogs. If Pajamas Media builds the engine correctly (I talked with Danziger for a bit and it certainly sounds like it will) then there's some good cash to be made.

Simon's plan is a lot more amorphous - a worldwide network of pundit/reporters whose local smarts and compelling voices beat the news organizations in the ground war and everyone in the battle for mindshare - but it needs a hell of a lot more development. There's a vast gap between responsible reporting and passionate blogging, particularly when the blogosphere, by and large, does most of its reporting by standing on the work already done by the world's, um, reporters.

As someone with more than a passing interest in this proposal, I'm curious to hear from readers whether they think either or both aspects of the Pajamas Media proposal will fly.

posted by Dan on 04.29.05 at 10:25 AM


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