Advertising Technology, Today's VC Game?

Ken's Blog

Did someone start a newspaper fifty years ago specifically to sell advertising?

Did Brin and Page start Google to sell advertising?

The answer, in both cases, was no. They started from a passion to deliver the news and to provide better search (respectively). Google stumbled onto advertising after other monetization models had failed.

But startups today develop products specifically to attract folks/create advertising space. And then, presumably, they flip to Google (or other media giant of choice).

That's not business. That's a VC (Venture Capital) game. And not a particularly innovative one.

I saw the game in action at the Ad:Tech conference in New York.

What is Ad:Tech? Here's their Web site's opening paragraph...

"ad:tech is an interactive advertising and technology conference dedicated to connecting all sides of today's brand marketing landscape."

OK, that didn't help much. So I drilled down to their META DESCRIPTION tag...

"ad:tech - The #1 event for interactive marketing. The Digital Marketing Conference for Today's Marketing Leaders! Listen to speakers from around the world, view the latest marketing technology and delve into the details with global case studies and market research. Fuel your entry into foreign lands with multi-cultural marketing and onto new platforms with our hands-on demo sessions."

Geez, why didn't they just say so on their Web site?

Even their META KEYWORDS tag was more helpful...

"adtech, ad:tech, ad tech, @tech, ad-tech, global marketing event, Interactive marketing, interactive online marketing, marketing technology, search engine strategies, search engine optimization, interactive marketing, internet marketing conference, seo, interactive marketing event, seo conference, sem conference, behavioral marketing, data visualization, word of mouth marketing, advertising, web site optimization, cpm, affiliate marketing, interactive marketing show, experiential marketing, event marketing professional"

So what was Ad:Tech really?

Almost a waste of time. It would have been more productive to simply visit the exhibitors' Web sites. And the content in the keynotes can be obtained in blogs, white papers, and so forth.

As you may have gathered from my opening, I was particularly disappointed in the "state of the advertising Net." I expected diversity, some exciting companies. Instead...

I had no idea there were so many affiliate networks, ad networks, PPC-this and PPC-thats. Me-too-3-and-4s, and on and on. It's so mind-numbing that there's no way to know which one of those little booths might actually be doing something interesting.

I stopped asking "so what do you do?" because that doomed me to losing another half-hour of my life that I could never get back.

I learned to cover my badge from their scanners (capturing me in their database -- it will be interesting to see if the few that "caught" me will consider that permission to e-mail me -- it was not).

I was looking forward to the first keynote, by Nick Brien, Worldwide CEO of Universal McCann. I was interested to hear his big picture view of where the world of digital marketing is headed. Answer? He doesn't know (extrapolating the present into the future is easy), but he uses very big words and sweeping visions and glitzy videos to paper that over rather nicely.

What a contrast to the stimulating conversation I had with Andy and Mike Mindel during a dinner meeting. I learn more from smart, in-the-trenches folks who've bootstrapped their own business than from this VC-fuelled advertising, slick-talking frenzy bubbling at that heavily attended conference.

That said, there are some good takeaways for small businesses online...

1) Infopreneur SBIers who are depending on advertising revenues can rest easy. When I see this many companies trying to provide advertising solutions, it's because they believe that more and more advertisers are going to be looking to put more and more billions of dollars into quality, targeted spaces. Compared to the Web 2.0 solutions that exist merely to create ad space, theme-based sites ensure you solid future advertising revenues.

2) A strong alternative to Google AdSense may emerge, although they are more likely to be networks that aggregate "super-niches." Think of an ESPN aggregating sports sites. Or as I write this, Martha Stewart has announced a lifestyle network. This is a potentially interesting direction that could eat into Google AdSense, if the remuneration is competitive. (So far, competing networks fail to compete in technology, fraud prevention, and price.)

3) I did meet one interesting company. We may work together on providing an interesting complement to Google AdSense (and other contextual advertisers) for SBI! sites. This is a module ("Advertise It!") that was coming sooner or later, but with a completely different twist. It may be sooner, although it's too soon to say. Some exploration ahead. And we won't do anything just to be "me-too." A solution simply must have a powerful reason-to-be and provide truly value-plus to both publishers and their visitors.

4) Personally... what goes around comes around. Twenty years ago, Jan and I walked the floors of the large annual toy industry fairs in New York, Hong Kong, Paris, London, Milan and Nuremberg. The first and the last (of that list) dwarfed the Ad:Tech show, and I mean 10-20-fold.

The big difference? Walking toy fairs was fun (aside from the sore feet). And I don't mean because it was toys (although that was fun!). Folks were doing business, actually buying and selling "stuff." Ad:Tech often felt more like one big game.

Bottom line?

The future is bright for publishers of theme-based content sites. Build a quality relevant business, genuinely great and original content. Monetize it in a variety of ways, including the selling of ads. Advertisers/networks will pay you well -- they understand the value of an ad on a well-trafficked, highly targeted site.

All the best,