Monday, March 7, 2011

Tracking Your Every Move May Be Too Boring To Be Worth Much Money

So, most people will focus on the main story of this WSJ article on how advertisers are tracking individual people through your TV viewing choices (and then showing ads on TV based on your personal TV viewing choices), and it’s well worth it, if only to get a sense of how many strands of data can be used to connect you to stuff to sell. I, however, am interested in a brief nugget that appears midway through the article:
This new wave in monitoring Americans is driven, in part, by fear: The TV industry is moving quickly lest it lose ground to Internet advertising companies, which have found they can charge a premium for online ads that target individual people based on their specific interests.

OK, so that premium for online ads is much-hyped, especially among media optimists who believe that newspapers and other content producers can continue to give away content and still make money. But does that premium currently exist? It’s not with Google—their search ads are pretty cheap. I don’t think the content makers are harvesting that—here’s a chart from The Monday Note, in a good post called “The Publisher’s Dilemma”, about the Washington Post’s advertising revenues breakdown:



I think it’s hard to see a premium there. If you look at the Post’s website, it’s hard to see any premium-looking ads; in fact, I see many remnant ads that are notoriously cheap. Where’s the premium? Facebook? YouTube? New media publishers like Gawker and TPM? I don’t see it.

More to the point, if technology has advanced to this point, what’s stopping publishers from figuring out this premium ad stuff? It seems like all of the tools are there to demand such a premium? Or has the increase in supply of ads combined with the accountability online ads provide (which demonstrates just how ineffective ads are) made for an indefinite deflation in the ad market?

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