Jun
23
Meditation on a Dry Gulch
Filed Under B2B, Blog, Industry Analysis, internet, online advertising, social media, Uncategorized | 1 Comment
Wounded.Or at least hors de combat for a week . A swollen and poisoned leg has reduced the international traveller of recent weeks to an impotent and gouty Englishman on his back like some stranded turtle , leg in the air and , by default , an enforced spectator of World Cup football which threatens to give boredom a bad name . And not only that , but I failed to miss the British Budget speech. So the world I have come to occupy seems to be one wholly lacking in vivacity and imagination , where the responses of politicians and footballers alike seems to be concentrated on booting the ball hopefully upfield , with the objective that space or time or another dimension will solve all of our problems . And then , like the man from Porlock ,a client came knocking and broke into my medically-induced nightmare . And his question led me once more to ponder what happens to advertising models online when current observable changes have worked through their ever-shortening life-cycles .
Lets start just there . Suppose for a moment that you agree with me that life cycles on the web are still speeding up . In other words , it took a decade for Google to build its brand , but five years for Facebook , and perhaps three years for their successors . This is a direct response to the rapid increase in the speed of ntework communication and not just the size of user populations . We now expect that friends and collagues will respond to a network relationship which demands attention.My daughter reported to her family this morning that she had been quoted in a Bloomberg article in the San Francisco Chronicle : within 30 minutes she had email responses from her husband , her father and her step-mother . We talk the language of these changes in pace but we do not really understand what their impact will be .
Yet in one sense we do . Notice how the network never throws anything away . Business model development is circular , as with much else in a world where there is no maturity , just renewal . So when I get a question about lead generation as an advertising business model on the web , I am bound to go back five years to a time when , in the US , lead gen was being seen as the saviour of the online advertising world . And why does online advertising need a saviour ? Because although it has grown persistently through the decline of print advertising , it is still a small , low margin sector of the economic activity of the web , once you have factored Google out of the equation . And , if you believe what I have written about speed of change , then you must factor in the decline of Google , and its replacement by a semantic-based atlternative brewing even now in a garage near Bangalore .
Lead generation came about because its progenitors sought better than CPM returns , less dependence on search engines and more value-add to procure loyalty – stickiness . But just as the print yellow page players have never made an online impact commensurate with their offline power , so the lead gen players have never made an impact that measured up to the role that we designed for them five years ago . And part of the reason for this is another marked web behaviour model – the limitations the network seems to place on competitive replacement of aligned business models .
I need to unwrap that .I can do so by saying that in the mid-’90s I was one who proclaimed that a thousand business models would now flower on the web , and that users would pick the best , and then the better as it appeared , and so on in a frenzy of service choice activity . Well , I was wrong . What appears to have happened is that users chose , in every class of service , the best of its class , and then another , and while many more then appeared with enhancements , they stayed very loyal to those first choices , and many networked marketplaces became duopolistic as a result . And then , when a definite break with the old and still satisfactory services took place , it occurred because of market disruption from a new ( and usually technological ) market activity . These duopolies , while they should have been a market stabilizing activity , now show signs of breaking down more speedily .Bear in mind too that technologies are getting cheaper , and technology spend has rarely , if ever , been a barrier to entry .
Which is a dispiriting picture if you are a duopolist in an online advertising market sector . Is this a determinist model : you must go down when the technology silver bullet hits you ? Not at all . Just review your entire business model annually , and let users drive your service enhancements and technology picks .If you are a sector leader , the real barrier is brand – something it takes newcomers more time to climb over than technology , though the breathing space it provides is very short . In online advertising , any sector duopolist must surely be looking at video for value enhancement , at developing web presence for advertisers ( the leading growth field in this year’s Outsell survey ), and above all at social media/buying clubs online . And this investigation of the direction of flow and the speed of change begins on Day 2 , after initial service change . Looking back , the most common characteristic of change-agents has been their propensity to believe that once changed , markets would stay that way long enough for everyone to make money . It ain’t necessarily so .
Comments
1 Comment so far
[…] This post was mentioned on Twitter by Neil Thackray, David Worlock. David Worlock said: The coming revolution in internet advertising creates a problem for service providers http://bit.ly/bDXXZ4 […]