I suspect Scoble will be vindicated on video. I think we’ll all take another step out into the world and publish not just our written words but also out likenesses, speaking words. I like Scoble videos, although I tend to agree with this comment’s sentiments.
In his latest video, Scoble reverse engineers Techmeme. I’m not going to rehearse his video. Others already have, but you should just follow my link and watch it, if you’re interested.
I can add value by correcting Scoble on one point. Techmeme does digg. In fact, on Techmeme right now, the story right above Scoble’s reverse engineering includes Digg as a “subnote.”
PS. Deeplinking into video has got to catch on. I want to link to the part of the video when Scoble talks about how Techmeme ignore Digg and Reddit and StumbleUpon, but I can’t.
Pondering the Future of News, Steve Boriss asks, “if it is financially viable for TV networks to embed advertising into individual programs then make them available for download on any web site, why can’t independent reporters do the same with their stories, particularly those involving video?”
The answer is very high barriers to entry that come by way of transaction costs, which are just too high relative to potential ad revenue for it to make sense for buyers of ads. There’s a guy—a guy in fancy clothes sitting in his glass-paneled office on Madison Avenue—who’s got to make decisions about the best uses of his time. It doesn’t make sense for him to buy $1000 in ads from Joe Regular.
That’s where advertising networks come in. Putting google ads on your site will help you out, for instance. For the time being, however, google pays too little because it has little competition but also, more importantly, because its targeting isn’t good enough yet. The ads aren’t actually worth enough.
Coase-based advertising in which users auction their attention stream to advertisers by way of a grand platform is the way to go.
Published 2007 October 17
But not until other ads pay publishers more.
This is only speculation, really. But isn’t the point obvious? Despite Google’s nearly-by-definition efficient auction with AdWords, AdSense refuses to reveal what portion of each dollar of AdWords revenue goes to AdSense publishers.
Google will share more when it has to. Till then, it will enrich itself. I don’t fault Google for that. I fault others for failing to get at their own pieces of the pie.
Some other ad network will pay more. But first it must bring users to ads as well as Google does.
In the end, other ways of serving ads could work. But the economics of advertising call for networks—big platforms. The folks buying the ads demand that. RSS aggregators could serve their own ads and share revenue. Or Techmeme could set up a network in which bloggers allow Techmeme to display an entire post coupled with an ad and then to share the revenue back with the blogger. Once we figure out better platforms that serve at least as effectively as Google does, they can grab Google market share by paying more. If Google’s marginal revenue is greater than its marginal cost, it will begin to pay more.
And then news’s bright future will become more apparent.
(It’s been a long day, and my brain is
creaky dead as a doornail. Many thanks in advance to the person who can tell my why the following it true (it’s got to be, ya?): If markets are working, then mathematically speaking, the product of Google’s effectiveness and its sharing coefficient (the portion of each dollar of AdWords revenue that goes to AdSense publishers) should be about even with, say, the product of Yahoo’s effectiveness coefficient and its sharing coefficient. If Google’s contextual search is more effective, we would expect its sharing coefficient to be lower. If Yahoo’s search is less effective, its sharing coefficient should be higher.)