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.