Why have so many companies emerged despite consolidation among Google, Microsoft, and Yahoo?
It’s simple. CPC and CPM pays pennies per thousand to affiliates.
Traditional publishers want $10 to $100 eCPM. So do new publishers.
February 13, 2008
February 4, 2008
What is MaSP, AdNet, and IChannel?
When technology creates massive change, new language is needed to keep up with the plethora of innovations. MaSP (marcom service provider), AdNet (advertising network), IChannel (Internet channel), and iMedia (integrated media) is our language for categorizing the innovators.
This new alphabet soup classifies other acronyms to create a framework for keeping up with the many changes in advertising and media. Without this framework, MaSPs, AdNets, IChannels, and iMedia companies have overlapping functions – causing confusion.
Quick History of Media
Advertising on media started in 4000 BC with a picture on a stone. It had limited reach.
Advertising and media expanded with the invention of printing. That occurred in the 15th century. Thus, ad-supported media is a 500 year old business.
Publishing is simple to understand. A small group can manage a publication.
- Circulation managers buy or market to gain a list of qualified readers.
- Editors research and write credible articles.
- Publishers sell advertising to marketers seeking to influence the qualified audience.
- Large media companies consolidate many publications – saving some administrative costs. Independent publishers thrive despite consolidation.
Internet publishing is much more fragmented – harder to understand – but simpler for individual publishers to adopt.
Change Brings Fragmentation
Despite many acquisitions by Google, Microsoft, Time Warner, and Fox to consolidate media properties, technology innovations continue to fragment the market. The sum of the online revenues for these companies represents less than 5% of global and national advertising. Each has the cash flow to acquire many more companies.
Here is our categorization of the innovators.
IChannel (ed: The Internet is capitalized as a proper noun. Thus, we chose the capital IChannel.)
Internet Channels include developments that allow individuals or businesses to become publishers. Tools such as blogs, media sharing, and other social networking sites simplify self publishing. Server computers and networks are not needed.
Anyone can express themselves using words, photos, music, video, or other means of communication. Reporters become publishers – writing their own blog. Game publishers use Javascript or Adobe Flash to deploy games useable by anyone on the Internet. Photographers can post unlimited Flickr photos. Musicians promote themselves on Myspace. Videographers can start Youtube channels. Each is an IChannel with an audience.
Most of the tools are free of service fees – resulting in hundreds of millions of IChannels. Conversely, this trend dilutes the loyalty of the finite population to any one channel.
IChannel can be a traditional web site or any participant in hundreds of social sites.
AdNet
Internet advertising networks consolidate many IChannels and centralize the selling of advertising. Beyond CPM (cost per mille) models; CPC (cost per click) allows any publisher to earn a share of online advertising.
Services for IChannels insert text, graphical, and other ad formats – automatically allow IChannels to earn more advertising dollars with minimal work. New models are likely to change AdNet companies.
The term, AdNet, distinguishes legacy broadcast, magazine, and newspapers networks from their online cousins.
Google may be the largest AdNet, but dozens of new companies have carved new Adnets by market, geography, and need.
MaSP
Marcom service providers have created advertising tools that simplify the task for the largest ad buyers. Tools unify their purchases from many AdNets, create and serve rich media ads, optimize search keywod (SEO) purchases across many AdNets, and generate sales leads using creative strategies. MaSP simplify services for ad buyers.
iMedia
Large, integrated media companies have emerged to consolidate the most successful innovations. This includes acquiring iChannel, AdNet, and MaSP companies to expand their reach of users and advertisers.
These companies become the exit plan that motivates innovation.
Conclusion
MaSP, AdNet, IChannel, and iMedia summarize the categories of innovative companies in the new advertising economy. These terms simplify the memorization and analysis of the hundreds of innovators creating change.
Change creates fragmentation. Maturation leads to consolidation. The ad economics can be simple. This allows hard working entrepreneurs and investors to find niches and create wealth.
February 2, 2008
February 1, 2008
About the Author and This Blog
I am an economics major from MIT with two of the first macro-economic models for forecasting the national economy.
As a technology entrepreneur with an MBA from Stanford, I span:
- time sharing on mainframes;
- the invention of spreadsheets on personal computers;
- the first GUI for an accounting system and sharing those innovations with Macintosh user groups;
- first ad-supported vertical supersites on the Internet;
- social networking for writers and publishers;
- mentor to dozens of China entrepreneurs; and
- ad-supported real communities at local hotspots.
Ad supported media and communities – it’s the heart of my career.
The New Economics of Advertising
Through these ventures, I have worked with hundreds of magazine, book, and newspaper publishers – as well as online publishers.
Advertising is changing rapidly. Those partners are struggling with the increasingly complex technologies that define the advertising economics. Even for experts, keeping up with developments is like the old adage, “Blind men touching an elephant.” However, I personally enjoy the challenge to learn.
This forum uses a macro-economic framework for shared reporting on the events and trends impacting new media advertising. This includes reports of traditional media as they extend their reach to incorporate the many new technologies that impact advertising.
As I meet experts, I will be writing about those lessons and asking you to participate online. Together, we shall grog this elephant, the new advertising economics.
- Dash Chang (Facebook) (LinkedIn) (Blog Group at Facebook)
January 31, 2008
ANALYSIS: Supply and Demand of CPC
Opaque advertising economics where vendors provide incomplete pictures of keyword supply and demand.
Demand exceeds Supply
Top CPC categories: .
Average Search CPC Data by Category for December 2007, January 2008 – Feb 12, 2008 Search Tools Cost-per-click data by vertical category in search in the US.
High Demand Keywords
Top Search terms:
Top 10 Search Terms in 10 Categories, January 2008 – Feb 7, 2008 Search Tools The month’s top search terms in 10 categories.
High Supply Keywords
What is the supply by keyword or category?
Conclusion
For most affiliates, the huge, untargeted supply results in low prices.
