Should Web 2.0 sites share revenue with their users?

Google released an adsense API that allows websites to share revenues with their users. And Pete Cashmore wonders if it’s a good or a bad thing.

If set up incorrectly, revenue sharing can lead to an adverse selection problem – you attract spammers and scammers who are motivated solely by the money. The other issue is that without high value content, the rev share is abysmally low – Squidoo’s top earners get $30 per month, for instance. And let’s not forget that Google’s minimum payout is $100 [...]. I think this is a great move on Google’s part, but it’s still up to site owners to get the motivation part right.

We have been considering revenue sharing on coComment for a while, but I can’t think of a completely satisfactory solution. Sharing is relevant as users are generating content that we then reuse to create value. But in the meantime we pay the bills to develop and maintain a free service (and there are side effects as Pete explained).

So what’s the right balance between the value of the tool and the value of the content?

Less control, more credibility

David Weinberger interviews Richard Edelman, head of the world’s largest PR agency.

This discussion exposes the fundamental shift happening in marketing, with consumers getting more educated and developing a thick skin to mass marketing, i.e. taking the power back. We’re entering the consumactor era, permission based marketing will be the way to go for the next decades, and that forces a total change in attitude you can already feel in Edelman’s answers. Like when asked “what’s different about Edelman?”, he answers that they “try to be a good example” and “don’t always succeed”.

Wow! Marketers are human beings again, they are forced to be good guys, don’t always succeed, can’t have you to buy whatever they want, and even acknowledge they have to give up control on a message to make it credible. What a shift from just a few years ago, when one lousy Pringles ad could be used to sell greasy potato slices to the whole planet.

Q: Does the offer to provide product without strings scare companies?

A: Yes. Tech companies are scared the least. Heavy industry is worried the most. The mentality of corporations is the control of the message. We’re saying that if you want to be credible, you can’t control the message. E.g., GM Tahoe ads.

Q: If your product doesn’t suck, why do companies worry? It’s like 7th graders on the playground.

A: Marketers want to know they’re getting a certain audience at a certain frequency. The ad agencies have impressed on them for 30 years that you go from impressions to action. We — all of this in the room — deconstructing that model. You can’t have a topdown conversation where you buy a certain number of impressions. We’re saying it’s a horizontal conversation, peer to peer.

What will PR look like in five years by the way?

PR involved earlier on in the product life cycle: We’ll be a means by which a company can reach out to bloggers to affect prod development. Deconstructed press release. A more robust role in the corporate suite. I don’t see PR as being disintermediated. David Weinberger thinks PR gets in the way; no one wants to talk to the PR person. I think we should want the flak. We are indeed agents in that we represent our clients. I don’t see that PR has to be a negative connotation, which it currently has. We have to be about truth, listening, learning, and telling the corporation stuff it doesn’t want to hear. Five years from now, I hope PR people have the balls to say what they know. We need to give clients good advice. (We have thirty people blogging at Edelman. You learn by falling on your face.)

Link

Cup of tea

Victor Cerutti – lecteur de ce blog que j’ai eu le plaisir de rencontrer à Innovate Europe – m’a fait réaliser qu’il n’était pas très clair que ce blog existait également en version anglaise.

Comme j’ai tendance à poster en fonction de la langue du lien que je commente, et que je lis plus de choses anglophones, la version anglaise est en l’occurrence bien plus fournie et régulièrement mise à jour.

A visiter ici (RSS)!

The evolution of advertising spending

A survey conducted by MarketingSherpa shows how advertisers rank the emerging advertising mediums. RSS and blogs are already solicited, while mobile and podcasts aren’t in the immediate plans.

(via Steve Rubel)

The return of the stupid ad

It seems we have a major shift brewing in the online advertising world: as click fraud and smarter users (deleting cookies, getting more resistant to ads) make the current pay per click model less and less relevant, advertisers are going back to “display banners”.

Business Week: Wiser about the web

Online advertising breaks roughly into two camps. The fastest-growing side has been search-engine advertising, led by Google and Yahoo. [...]

But advertising executives predict that the display banners and videos that appear on Web pages will outpace search this year.

If this happens it will be a fundamental shift, with mainstream portals getting the nod over search engines in the advertising business. The consequences?

• ads are going to move to the mainstream sites. The long tail will have a hard time competing with the big sites. From Joanne Bradford, MSN’s chief media revenue officer: “the niche sites are going to have a harder time competing, [the demand outside the elite] will start cooling off in 18 to 24 months.”
• there will be changes at the top of the food chain. If this is true you might want to put your money or NYT.com, mySpace or Yahoo rather than on Google. Big guys will still be big guys, just maybe not in the same order than today.
• new metrics will emerge to quantify the quality of ads. Instead of measuring success through the number of clicks, indicators will be time spent with the ad, movements of the mouse to know which parts of the banner appear to interest visitors, etc… Contrary to what I thought there is a lot of collectible data with these ads. “We have so much data that agencies are hiring teams of analytic people, PhDs in statistics, to make sense of it all,” says Greg Rogers, director of strategy and insights at a New York media agency.
• new advertising tactics will appear. The article cites an interesting way of optimizing a campaign by doing “advertising arbitrage”, “making money on the spread between premium relevant placements and cheap sites”.

What advertisers really want is premium targeting at the price of cut-rate sites. That’s the premise behind behavioral advertising [...] Agencies [...] track the online sessions of Web surfers. By tagging them with a cookie when they visit one of the agency’s thousands of affiliate sites, the system can follow a single surfer, say, from Yahoo to popular auto site [...] to an obscure hobby site on winter gardening. While the agency’s computers don’t know the surfer’s identity, they can deduce from the stop at Autobytel that they’re dealing with a potential car buyer. But that site is pricey [...] so the behavioral system hits the viewer with a car ad when he’s on the much cheaper gardening site.”

Bottom line is that one of the most fundamental assumption of the contextual advertising industry might not be as true as it seems: maybe the best ads are not those related to the content a user is currently reading.

TACODA’s researchers recruited 30 human guinea pigs [and] hooked them to an eye-scanning camera and recorded every darting movement as the subjects were shown 50 identical Web pages. The result: The ads placed on pages unrelated to the advertisements’ message actually attracted 17% more looks.

Surprise, stupid ads are the better ads again!

The right audience for web advertising

I met Mark Gazecki in Munich today and we discussed adwords based business models. He told me he has a friend who is a total web newcomer and who is systematically putting more trust in the right side of a Google results page. The side where links are ads. For some reasons these make more sense to him.

This made me think that if you want to make money out of Internet advertising you better have very focused content (to easily display more targeted ads) and an audience of people who haven’t been on the web for a decade (and whose text-based-ads crap-filter isn’t too high).

That’s why I would rather put my money on a Plentyoffish-like business rather than on an ajax desktop.

Just in time

Thanks to Deborah Polasek the ballpark.ch homepage is now back up as I like it: simple, complete, concise. It is in French only at the moment, but you will see I am not a big believer in the “we put tons of pages full of empty content on our website to feel like a bigger company” mantra.

Business opportunity in online advertising

After reading Marc-Olivier Peyer’s post on how the current advertising model was on his last leg, I realized that there indeed was a market for a new form of advertising.

Not being overly interested in this field – having clicked no more than ten ads in my 11 years online (half by mistake) – I thought Google was killing the competition, and that “innovation” was limited to ads in RSS feeds or better looking banners; NOT a completely new business model. But it seems that it is what lies ahead: Wired reports that bogus hits on Internet ads [...] could crash the entire online economy. We will need to find something else.

So what is it going to be? No idea. Like most of us the only thing I know is what does NOT work.

Advertisers long thought the web would finally give them total control of their ads, and get out of the “Half of my advertising is useless, I just don’t know which half” era. Now they realize that it won’t happen, because people will forever be overwhelmed by ads, have limited buying power, and are not always open to being taken out of their way. These same reasons make me skeptical towards cost-per-action (or cost-per-transaction, cost-per-acquisition: advertisers pay only when a click results in a specified action, such as a sale or a Web site registration), one of the proposed model for the future.

I will follow that closely. I just added “online advertising” to the list of keywords that go beyond my crap filter. Seems we will have some interesting changes in this field in the coming months. Who is going to find the right model and get bought by Google? Is it going to be a Swiss company?

Activation de la modération des commentaires

Est-ce la rançon du succès? J’essaye de trouver du positif dans la récente attaque de spam qui m’oblige à activer la modération des commentaires. Je me dis que si les spammers viennent polluer ce site, aussi minables et mal organisés soient-ils (vos URLs ne marchent même pas…), c’est qu’ils pensent que du monde nous lit!

Allez c’est Noël, il faut regarder les choses par le bon bout me dit-on…

Comment moderation

Is now turned on in this space, thx to the pathetic spammers trying to get undeserved Google love via our comments. Sorry for the burden people, I will try to do my best to publish your reactions as soon as I see them.