Jun
30
I just finished listening to Steve Gillmore’s talk at Gnomedex (no I’m not there, but I’ve had the audio stream running on the Q most of the day). He spoke, once again, about the ‘Attention Economy‘, a concept that roughly translates to: “There’s real money to be made by knowing what you, Joe Media Consumer, read/watch/listen to.” This is, of course true.
Every media company for the last 100 years, from NBC to the New York Times, has been sustained by money made from eyeballs + time. The twist in the internet age (as evidenced by Google, Yahoo, MSN, Amazon and countless other internet companies) is the level at which they’re able to make money off of your personal attention. Buy a Michael Bolton CD on Amazon and, hey, you’d probably also like this Celine Dion CD. You know you want it, you crazy music fan, you….
Gilmore’s new twist on this whole thing is that you (yes, you Joe Media Consumer) should personally own and make money from your attention. Today you give all of your attention away to Big Media (old and new). Surf a while on Yahoo, there’s money being made. By Yahoo. MSNBC.com is no different. Gilmore’s proposal is this: cut out the middle man, through some magical combination of Web 2.0 wizardry and VC money. Give it a couple of years and we’ve got an economy made up of people who make 6 figure salaries doing nothing but surf MySpace.
I was only listening in via streaming audio, but from the tone of the questions it sounded like even the Alpha Geek Future-Obsessed Gnomedex audience didn’t buy it. Of course they didn’t. Few of them actually understand the media business.
TV advertising has an ugly little problem called “wasted reach” (or more kindly “ineffective reach”). Most advertisers aren’t targeting everyone in the country with their products- they’re trying to sell a particular audience. If you buy a :30-second spot on “Lost”, who are you actually reaching? Maybe you’re trying to sell a new VW SUV. You know the target buyer for that car, actually in fairly scary detail. What percentage of the “Lost” audience actually falls within that target? Say 1/3. That’s a lot of waste. Now, it get worse– your target buyer is actually really likely to have a Tivo and skip the commercial all together. Or maybe they’re just downloading the episode off iTunes. Now you’re sweating. You target buyer is (cue scary music) unreachable.
That’s where these here internets comes in. There’s no skipping the targeted returns from Google AdSense. You told Google exactly what you’re looking for. The AdSense advertiser just slips right in and makes the sale. And who makes the money? Google. What did you get? A crappy $15 Celin Dion CD. Hmmm….
What if someone came up with a way that you could save up your own browsing history, then share it directly with the advertisers in exchange for discounts or even hard cash? Would you do it? “Hell no,” you say. OK, do you use one of those Club Card thingies at the grocery store? You’re already doing it. Why? Because you make (or at least save) money.
What would advertisers pay to be able to target you exactly? Every dollar they spend would go toward reaching exactly who they wanted to reach. And think about how much easier it would be for them. No more having to buy ads on Google AND Yahoo AND MSN and ESPN (and NBC TV and Fox, etc). They’re just buying you (which is what they were trying to do all along anyway).
And we’re talking real dollars here. GM spends something in the neighborhood of $3 billion a year on advertising. Divide that up among 300 million Americans, and that’s good money. Divide it up among the much smaller group of Americans likely to buy GM cars, and that’s a living.
Yea, there’s the little bit about who’s going to organize it all, how these targeted ads get delivered, how to combat fraud, etc. These are monumental problems. Not many companies could even contemplate it. In fact, I can only think of one or two….
But my guess: it’s coming. In fact, if you’re young enough to be reading a blog you’ll probably live to see it. So fire up MySpace and start thinking about how you’re going to spend all that money.
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