MicroContent: The New Online Advertising Business Model – It’s Social Media and Vertical Media
Being in the online advertising market for over 10 years, it is evident that there are a big changes happening. Last month at the most recent ad:tech in New York all the talk was around the need for ‘new’ online advertising products. Video on the web took center stage. In fact, the biggest elephant in the room was the horrid nature of pre-roll video in today’s web video content market. Everyone was just shrugging their shoulders, “Yeah we know it (pre-roll video) is ineffective and produces a poor user experience, but there is nothing else available”. This was the general sentiment among top advertisers and online media vendors such as Ogilvy, GM/Planworks, Fox, P&G, YouTube, NBC, etc.
New Models Coming
The public secret today in online advertising is that PPC based advertising is saturated. Banners are sliding into the land of irrelevance. As more and more online advertising dollars flood into the online sector, new advertising media will capture most of the revenue. What will the new advertising media be? It will be in the form of “Vertical Media” and “Social Media”. We are already seeing a flourish of vertical ad networks developing. Social networks are where the most exciting and relevant digital advertising solutions are developing. Social networks have unique micro-targeting capability and amazing behavioral measurement capability. The big question is, “What is the ad unit?” It’s targeted Microcontent. The growth in microtargeting networks is outpacing the inventory of Microcontent. There isn’t enough inventory of Microcontent ads. This is causing huge dissatisfaction among microtargeted community users who are jammed with irrelevant video ads.
New Viable Solutions
Podcasting, micro-video ads, long form video advertising, and other forms of contextual and behavioral advertising will emerge as the viable and scalable solutions. Advertisers love using podcasting and video ads. Believe it or not, users love them too. Microcontent is excellent ‘microcreative’ content that serves users in these new ‘microtargeted’ communities. Curt Hecht, executive vice president and chief digital officer of Starcom MediaVest and GM Planworks, confirmed this at ad:tech last month during his keynote session. Expect the big marketers to use social and vertical media to deliver entertainment, information, and call to action with ‘microcontent’. This will be a big monetization area for publishers, podcasters, and agencies. Downloadable media and online environments like podcasting, virtual worlds, blogs, and social networks will benefit the most. Expect proven methodologies and implementations around measurement to emerge. With that, we will see the scalable measurement solutions that value relevance of the audience. This is being addressed by entrepreneurs and members of the ADM. With all the measurement and new offerings, expect to see solid advertising ROI models in 2008.
Catalyst ?
The big catalyst is money. Too much money is coming into the sector for these solutions now. The combination of ‘microcontent’ and ‘microtargeted’ social network technology (APIs) will be a big driver to transition to the new ad models. I can’t wait to see which big advertisers lead this trend.
Silicon Valley Technology Blog - John Furrier 
Good article, thanks for the insight.
I stumbled across this the other week and thought it would be a good plug for this topic. Time to endorse MUGC – “Monetizing User Generated Content” – users have complete control over who and what they endorse. 2008 is going to be an exciting year.
A quick search and I rediscovered their press release here:
http://www.pr.com/press-release/62268
The big thing to this post is that you are so right on. I would add that collaborative advertising will be complementary not conflicting with MicroCreative video.
Great Post. Welcome back John. Keep on posting on what you’re working on.
Whenever I come across excellent content I am invariably operating outside of my own particular discipline, and it is the same that I do here. When one is looking at the micro level, what we know can serve as a personal distraction i.e. pareto is a distraction, if it blocks understanding of power law distribution – the most visible product of which today still is Chris Anderson’s Long Tail.
The problem with the Long Tail for me is the same as those who start producing highly sophisticated economic models, at some point one we are not looking at reality anymore but a self-fullfilling theory, one that may yield tremendous short-term profit but invariably won’t produce long-term sustainability.
This is where stepping outside of ones own discipline helps i.e. by viewing what the Grameen Bank did with micro-credit. I also found reading Alberto-Laszlo Barabasi helpful to get back to core basics, for he was one of the first to see the basic realities of power law distribution and comprehended this with research of what can or may occur in an increasingly linked universe.
It is always useful I think, to step out of the advertising world to see how others deal with life at the micro level. The Grameen bank, as well as Kiva are an obvious case-study in the social responsibility & financial field but we can also go to the design field where Jakob Nielsen provides the basics of the kind of mindset one needs to view micro opportunities.
Jakob Nielsen points out in this piece about microcontent some interesting observations, from which I extrapolate that human attention will most likely scale down in response to marketers trying to scale down – the net effect of all marketers doing the same thing eventually will probably create the very difficulties, a self-defeating cycle I suppose and one I would hazard to guess is mostly self-inflicted one from not engaging thoroughly at the front end of any new process.
If ad agencies had this all worked out, IMHO they wouldn’t need to be worrying about the difference between social and vertical media or worried about new kids on the block, so I guess the word “inventory” comes from that agency world and so I wonder whether if it is worth my while to learn the old language of ad agencies or look for the new language of those on the cutting edge of micro-advertising. Or indeed does the language itself serve to get in the way?
What I am personally really looking for is to self-determine who those cutting edge people are because I am not stupid, one learns from the best but one can also earn from the mediocre but merchants of the short-term if one simply wants to make a living – I can recognize this difference but yet only know it when I see it for this is a part of an emergent experience.
The more freedom we have to view something, the more we will be able to see, so my words should not cloud other people’s focus or serve as a distraction, this overview examination only helps the examiner, there is no shared reality here other than what it boils down to my own personal or business execution.
What I do see written in this piece here is an entrepreneurial zeal that comes from a well of experience, but to improve imaginative or strategic realization about creating new approaches, require us to relax, to let go of the existing language and look at this opportunity in new ways. New language will be formed by those who usually form it, those who are chasing the tail or writing about the leaders in the field, not simply by those at the cutting or leading edge of the field. Thank You for allowing me to think out about your particular world out aloud here.
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As everyone knows by now, video is very exciting. I think in the next few years people will discover that video is appropriate for certain areas of the consumer market, right now it seems like everyone wants to use video for everything. I think the small business arena will benefit the most from video which is pretty much the thesis behind http://www.Jippidy.com
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Justin,
Personally I think social media is a waste of time.. Does anyone remember POGS from back in the 90’s? Social Media as a way of advertising will have just about as long a lifespan!