The Web is Not an Ad Supported Medium
The web is the greatest marketing channel ever created but there is incredible irony in that. It was not created as a marketing channel. In fact, understanding that fact and even leveraging it is one of the best strategies you can undertake in online marketing.
“This is the first mass marketing medium ever that isn't supported by ads. If a newspaper, a radio station or a TV station doesn't please advertisers, it disappears. It exists to make you (the marketer) happy. That's the reason the medium (and its rules) exist. To please the advertisers. But the Net is different. It wasn't invented by business people, and it doesn't exist to help your company make money.”
The recent debate about privacy is propagating the idea to consumers and the FTC that the Web needs third-party cookie tracking to survive. Frankly, I think it is demagoguery.
“As long as enough people value targeted advertising in return for free content, the whole system will continue to work.” - BlueKai CEO OmarTawakol in AdAge
Appealing to the value of content in the privacy battle is a losing proposition. Part of the reason Display is in this mess is that the content itself has become commoditized. A stronger more appealing argument would be around the value of the ads. Jarvis Coffin has the best take on that however, even he alludes to the “brand destruction” that can be caused by targeting. Advertising people I’ve spoken with have mentioned Advertiser concern about having their brand be seen as tracking consumers. The bottom line is expressing the value of banner ads is really hard when 99% of the time people are not clicking them.
The free content argument is also a bit disingenuous since the rise of audience based targeting is all about buying the lowest cost media possible. How does this make sense with an argument about advertiser supported content? Ad exchanges are hardly a bastion of “vibrant” content.
Search is free to use and doing splendid as an advertiser supported medium. Email, also free, is doing quite fine thank you as well. As far as Display, Site level direct deals with the top publishers still account for 75% of the ad spend (JEGI IAB 2/10).
The challenge that needs to be embraced is making targeted advertising as helpful, useful and valuable as the underlying content. Get that to happen the issues of privacy disappear. Personally, I don’t believe that level of relevance is possible with third party cookie data but whatever happens have no fear. The web will survive and prosper with or without whatever ad targeting technologies exist at the time. My own included.