New Era of Online Advertising (3) toward Decentralization
The profit model of Web 2.0-based advertising depends on distributed ads, but Bloggers are not ready for it yet.
[+] The dispute about No.1
According to a report released by an online surveyor Hitwise in July 2006, a social networking site MySpace.com attracted 4.46% of the Internet users in the entire America, and beat Yahoo!, Google, MSN and all other major portals to be the No.1 website in terms of traffic in the United States.
The report was challenged immediately, for it compared the visits of MySpace.com only with those of mail.yahoo.com (the email service of Yahoo!) and the home page of Yahoo!, as well as the visits of the home page of Google, ignoring the fact that those major sites also offered many other services.
The report released by Nielsen//NetRatings in March 2006 might provided a more comprehensive ranking. It indicated that Yahoo! received 100 million unique visits in the same month, followed by MSN: 95 million, Google: 93 million, and MySpace: 36 million.
According to another surveyor, comScore Networks, as of March 2006, the total population of the netizen above the age of 15 in the United Sates was 152.04 million. A simple calculation shows that the reach rate of Yahoo! was 69%, MSN: 62%, Google: 61%, and MySpace: 23%.
For ad clients, who is the No.1 is a question that concerns where to put their ads on. Therefore, disputes are inevitable in the industry. For me, however, the above figures have other significant implications: for any major site, at least 30%-40% of the people online are not your visitors.
[+] The distributed online advertising model
This is a problem of the Web 1.0 model. Traditional models require users to visit a website to see the displayed ads. For people who don't visit the site, the site owner could never expect to earn money from them.
Essentially, Web 1.0 has inherited the idea of centralized monopoly from traditional media. In addition to attracting
more visits, site owners should start to think about how to reach out to the 30%-40% of the users who do not visit their sites and generate incomes from them.
The decentralization mindset is the core of Web 2.0. Instead of pursuing more visits, it requests reaching out for more and more distributed Internet users. One typical example of this model is the Adsense service of Google.
Many Internet users often notice that there are Google-enabled ads on many small sites. This is the Adsense service. Small website owners apply for a piece of program code from Google and install them onto their web pages. The ads will be pulled out automatically.
Google will automatically send ads in accordance with the content on the web page to increase the click rate, and pay the site owver by clicks. It is a global service. Google will mail checks in USD to site owners, many of whom have got rich through this way.
[+] New online advertising companies are emerging.
You will see the ads sent by Google, even if you don't use Google at all. Through this means, Google is able to infiltrate into thousands of sites and to make money from the visits that do not fall onto its own web pages. It is particularly appealing in the midst of today's Blog tide, where anyone could easily be the owner of a small site.
Google is the first to see and have confidence in this distributed power, although Yahoo! and MSN are catching up fast now. The Publisher Network of Yahoo! in test and MSN AdCenter are expected to provide the similar service.
As the provision of such services does not require the service provider to have its own website, many third-party online advertising companies are emerging. With business models same as that of Adsense, these companies are providing small sites or Bloggers with program code, while managing to attract ad clients at the same time.
The market is growing along with the increase of Bloggers and their readers. You can easily find at least five such companies in the United States. Similar advertising agencies are starting to emerge in mainland China and Taiwan too. This distributed advertising model fits perfectly to the Web 2.0 mindset.
Predictably, the more Bloggers there are, the more distinct the identity of online media will be toward decentralization and distribution. However, are Bloggers ready for this? The fact is few Bloggers are able to earn money from this advertising model so far.
[+] Make money? Bloggers are not ready yet.
In this model, website owners and Bloggers are paid in accordance with the clicks of ads. Therefore, the key of earning money is to attract more visits. In this regard, most Bloggers can only keep their Blogs as a part-time job, instead of an approach of making big money.
Worse than that are the hostile attitude of many Bloggers against commercialization and their lack of the skills needed. Many early Bloggers regard Blog as grass root media and have a strong anti-mainstream sentiment. For them, to make money through Blog is like to compromise with the main stream. That would be uncomfortable for them to accept.
This anti-commercialization sentiment has been obvious in the cases of famous Blog communities such as Blogchina.com and DoNews.com. When they tried to embrace the tide of commercialization by putting ads on their web pages, they met the strong opposition of Bloggers, who felt it was a shame to post ads along with their articles on the websites. Making money is the hardest thing for Bloggers to talk about.
For some Bloggers who are starting to add Google Adsense on their Blogs, the lack of skills needed is another problem. Few have learnt how to use the traffic analysis report provided by Google to adjust the position and the dimension size of the ads on the web page. As a result, either the ads intervene into normal reading, or they're ineffective to get more clicks.
Few Bloggers have the mind of "doing business with their personal media" yet. As a matter of fact, they are not ready
to compromise their writing style for more visits or clicks yet. Maybe we can only wait and let time solve the problem.
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- Today in History
New Era of Online Advertising (3) toward Decentralization - 2006/07/30
What to Invest When It Comes to Internet Business? - 2005/07/31
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