Coming up on the editorial side of things, I never paid too much attention to ads. In fact, I can still go through a newspaper without seeing the ads, unless I consciously decide to look at them. But, in trying to figure out the evolving mediascape, I really need to pay attention to advertising. For one thing, it’s still the predominant way we finance the journalism. For another, advertising and marketing are being as severely disrupted as everything else and that has serious ramifications.
Consider these recent posts in blog world.
In The death of the intermediary, Scott Karp reports that the rapid rise in user-generated web content is opening up new ways for companies to connect with customers, by cutting out some of those traditionally involved in the advertising value chain. He asks:
If marketers can get their own consumers to create marketing messages for them, and then get those same consumers to propagate those messages through online social networks — all for free — why should they give a dime to media and advertising companies to serve as intermediaries?
(Those of you who aren’t reading Karp’s blog, Publishing 2.0, regularly are missing out on some valuable information and ideas.)
Jeff Jarvis also has ideas about changes to the way advertisers hook up with publishers. In The open ad marketplace, he details a system that makes it easier for advertisers and bloggers to get together. Jeff’s proposal has room for current players (ad agencies and the like) but also for new ideas and players.
There have been other recent events and activities that are producing some potential long-term threats. I see three.
One is the increased competition for advertising. If the long-term trend is indeed online, there are many more competitors for those ad dollars that now support journalism. Google, Yahoo and now Microsoft are sucking up (or will suck up) an awful lot of revenue, and advertising support is the current business model for a while range of online services.
The second is the potential for companies to use the net for marketing that goes beyond, past, through or over the traditional ways of advertising — giving someone else a ton of money to spread your message. The ability to speak directly to your market (on either your terms or theirs; see the squib today on searchable advertising) cuts out a lot of middle-people, including agencies and publishers.
The third is that the internet offers the opportunity to get more bang for less buck. If advertising can be finely tuned to desired audience, the need for mass broadcasting (and the associated cost of that) disappears. While much of the advertising world relies on a mass media approach for brand name promotion, etc., a significant portion of it needs only to reach a select number of actual consumers. That works even at the hyperlocal: if I run the corner grocery store, I only want to promote that in the immediate neighbourhood. Spending the money for advertising in the community newspaper is overkill and wasteful. It’s still not simple to narrowly target advertising, but it is becoming easier.
The worry here is that without the broad-based, pricey and mass-market oriented advertising (and I’m sure there are more challenges to that than my editorially-biased brain can’t fathom), we cut deeply into the ability to pay reporters to go do the journalism.
UPDATE: More evidence of how the advertising world is changing: Wal-Mart Backs Online Auction for TV Ad Dollars.
TAGS: ADVERTISING, JOURNALISM, MEDIA
