Category Archives: 2. Marketing Technology

Value Added Marketing Launch

I’ve just returned from a week in NYC, and the announcement of my new business ventures during the Inspiration Festival. It was a whirwind of a week, starting with a weekend at The Gathering, held this year in Brooklyn, with an endless stream of mind-blowing presentations from artists, entrepreneurs, writers, musicians and scientists, and ending with a preview of Wired’s NextFest, complete with intelligent robots, futuristic cars and Branson’s new space ship. In the middle was Juliette Powell’s Inspiration Festival, a 3-day gathering of top creatives from all over the world who converged on New York for Advertising Week. There were a lot of compelling presentations and discussions on marketing, advertising, technology and culture, at venues ranging from an art gallery to a breathtaking former synagogue in Soho–and some of the best art and entertainment imaginable. It was a far cry from the hotel ballroom-and-buffet conferences that put you to sleep before lunch–and a fantastic venue to launch two new ventures…

A_logoFirst up, the Value Added Marketing Association. I launched VAMA to address one of the most persistent shortcomings of marketing today–technology is advancing far faster than marketers are able to adopt or adapt it. Most marketers think they’re on the cutting edge if they’re managing SEM programs or deploying blogs, but there’s a world of technology out there that could help improve the practice of marketing, if only there were marketers who knew how to use it. In the Enterprise IT space, there’s long been a successful channel of Value Added Resellers who bridge the gap between application Vendors and IT managers. VARs keep up with all the latest technology so IT can focus on keeping their systems functioning properly. VARs have become trusted advisors who make product recommendations, assist with installation and integration, and even help with system training and maintenance. The existence of VARs has accelerated the development of new enterprise applications, and helped IT managers keep up with the new technology.

Now we need the same structure for marketing. Marketers simply must get smarter about technology, and the best way to do so is to provide a channel that can help them identify and target relevant technologies that can improve the effectiveness of their programs. VAMA will provide that structure by creating an association that connects marketing technology vendors, marketing agencies, and marketing operations managers. VAMA will spotlight new technologies to keep marketers in the loop; beginning in ’07 we’ll publish an annual list of the VAM100, and host an annual marketing technology conference called VAMX. Check out the VAMAweb site, and let me know if you have any recommendations for the ’07 VAM100 list.


My second venture, MotiveLab, is a parallel concern–a "marketing lab" where marketing fundamentals can be explored in the light of new technologies. I’m already working on my first project–a product roadmap for a publicly traded company, which, instead of being published as a paper brick that will be out of date in 6 months, will be deployed as an internal Wiki, where product managers can keep their roadmaps continually up-to-date and accessible to stakeholders. I’m also exploring a mash-up between social-networking and content management tools to power a customer advisory board.

MotiveLab is essentialy where I’ll have the chance to explore, while VAMA will ensure that I have one ear always to the ground to know what’s up and coming in marketing technology.

I’ve got a lot of work ahead, but now that the seemingly endless incubation has ended, I can focus more on the kind of work I love to do. You should be seeing some more consistency in the Marketonomy posts, and some more penetrating analysis of marketing strategy, finance and technology in the days and weeks ahead. Let me know what you think of the new ventures.

Marketing Mechanization

I’m working on some of the materials for my launch next week, and one idea broke out of my framework today. I’m not going to go into the entire framework now, it’s enough to say that I’m processin a lot of the meta ideas about marketing, its role in business, and its role in society.

There was a paper in the Journal of Marketing back in Summer 2003, called "From Market Driven to Market Driving: An Alternative Paradigm for Marketing in High Technology Industries", which was later published as a book. I don’t know how popular the book was, or how it was received in academia, but it had an interesting premise–that some companies lead markets by developing new technologies and compelling others to follow them, while other companies are driven by the market, especially by focusing on customer needs and responding to them. One company blazes a new path (often failing), while another follows in the market wake.

This is not an exclusively descriptive or prescriptive view of marketing. It’s an interesting filter through which to view a company’s activities, and it has some nice intersections with other corporate and marketing strategy theories–particularly the concepts of Positional vs. Resource-based Strategies. Some companies will naturally do better at one or the other approach, and the myriad other factors that contribute to success or failure will always obscure the degree to which adherence to a specific strategy actually determines an outcome. But that’s a thread for wonks.

What popped out at me today is a distinction that I don’t think is adequately explored by this paradigm, which is the Manufactured Market Leader–the company that embarks on a market leading course not because it truly has a visionary product it is convinced the market will adopt, but because it is convinced that it can sway the market despite the product–through partnerships, distribution, licensing, whatever.

It’s one thing for a couple of passionate engineers to leave their jobs, set up shop in a garage, and knock out a prototype that ignites the market because it is a transformational disruption. It’s quite another to try and manufacture a process that delivers the same result. For one thing, such attempts typically get captured by the "market-driven" paradigm, because finding the revolutionary product leads to a lot of market research and reactionary thinking. But the other effect is more troubling: a culture of marketing that is based neither in a true pioneer mindset, nor a true customer-engaging mindset, but a manufactured hybrid–a marketing approach that wants to artificially generate the benefits of successful pioneering–the wild fan base of acolytes–without taking the time or trouble to be responsive to the market. The symptoms are loud branding campaigns and highly aggressive lead-gen techniques, with poor customers service and short product lifecycles.

I realize this is probably more navel-gazing than most people enjoy on a Thursday afternoon, but’s a piece of a larger puzzle for me. It’s part of a series of observations about how marketing is evolving in different sectors, and how the increasing focus on marketing performance is creating a mindset of efficiency-driven mechanization. I’m not wringing my hands over it, as much as I’m amused to watch the equal-opposite trend continue to emerge–the growing power of consumers who are increasingly driving market decisions through information networks and greater scrutiny of marketing practices. I hope companies that are investing heavily in marketing mechanization aren’t under the illusion that their man behind the curtain will amaze the market forever.

Mobile Marketing Mindlessness

This is the kind of thing that just drives me insane–that proves to me just how stupid and short-sighted businesses and marketers can be, or worse, how cynical.

A few years ago, when the complaints about spam reached enough of a pitch to reach the ears of legislators, many businesses, and associations like the DMA, took positions that did not reflect what consumers (their customers) wanted. At first they said we don’t need no stinking regulations, there is no problem with spam, and then when it was obvious congress had to do something to look like it was listening to constituents, they got into the lobbying act to craft regulations that still let them send unsolicited mail. (And boy, did that CANSPAM act hobble spammers…)Today, the estimates are that 80% of *all* email is spam. Market-research firm Ferris Research tallied the cost of spam in 2005 at $17 billion in the
United States and $50 billion worldwide, reflecting lost productivity, costs to purchase and administer anti-spam systems,
and time wasted dealing with spam with legitimate
messages mistakenly tagged as spam.

Now, spam is reaching into Text Messaging. But there’s a twist. You pay for it. Since most mobile carriers charge by the text message (often 10-cents per message), unless you buy a bulk texting plan, you have to pay for every spam message you receive. And guess what? The carriers don’t think this is a problem. Not only do they not have robust systems in place for blocking spam, they don’t have other, more obvious systems in place to let you determine who gets to send you a 10-cent COD text message.

Here’s an outtake from David Lazarus’s column at the Chronicle:

Most wireless companies focus their filtering efforts on known spammers.
Customers are typically given the option of blocking messages from specific

This, of course, leaves the door open for other spammers to get through 
—  at 10 cents a pop for cell-phone customers without costlier plans that
accommodate more text messages.

The more consumer-friendly approach would be for all text messages to be
blocked except for those from senders given a green light by individual
customers  —  a "safe list" that could be regularly updated online by the
wireless customer.

That way, you’re charged only for the messages you send and the ones you
want to receive. Everything else falls by the wayside.

Not one major wireless company gives customers this option, although
Cingular offers a service that blocks all text messages except those sent to a
separate address created by the subscriber. 

Laura Marriott, executive director of the Mobile Marketing Association, an
industry group, said such a system is unnecessary because of various safeguards
already in place, such as spam filters and guidelines for association members
that consumers "opt in" before receiving any text messages.

"We have done an extraordinary job as an industry to protect consumers
from spam," she said.

It’s nice to know the MMA cares so much about consumers. Let’s take a little walk over to the Mobile Marketing Association Web site, shall we? If we go to the "About MMA" page, we find a mission statement:

Mobile Marketing Association is an action-oriented association designed
to clear obstacles to market development, to establish standards and
best practices for sustainable growth, and to evangelize the mobile
channel for use by brands and third party content providers.

members include agencies, advertisers, hand held device manufacturers,
wireless operators and service providers, retailers, software and
services providers, as well as any company focused on the potential of
marketing via the mobile channel.

And if we look at the board of directors we find a nice representative sample of major carriers, entertainment companies and agencies. Browse the rest of the site, and you’ll find tons of case studies, research papers, and statistics that show the tremendous potential of reaching out to customers on their mobile devices. The MMA has been very busy. And oh, hey, here’s a section for Consumers! Whoops. "Coming Soon". Consumer Information? "Coming Soon". MMA Consumer Initiatives? "Coming Soon". Yes, consumers carry a lot of weight at the MMA.

So here we have a problem that we have seen before. Spam. It causes us enough headaches that we have created a very successful industry that gladly accepts our money to stop it. It took us 7 years to get that far. Now we have the same problem cycling up to tackle one of the fastest growing new messaging platforms. But instead of building an industry to block text spam, we’ll now pay the carriers directly for every message they don’t see the need to filter. Hmmm. Is that an incentive for the carriers to get into the spam business themselves? And finally, we have an industry association that in the press proclaims its righteous dedication to protecting consumers, even while saying that implementing measures to protect you and me from paying for ads we don’t want is not really very reasonable. I’m so glad they’re thinking of us.

Look. If you’ve read my columns or blogs long enough, you know I’m pro business. I’ve done a lot of work with carriers, and I love the products they develop. You also know I’m pro marketing. I see tremendous potential in Mobile Marketing, and think a lot of the work the MMA produces is fantastic. But I’ve also seen plenty of stupidity from carriers and marketers, and you always know it’s coming when you hear them pronounce what is good for customers. Because it never is. When. When. When will these people figure it out?

If the MMA was half the industry association it should be, it would not be bowing down to the carriers and carrying their water in the press, but would be challenging them to create a sustainable market practice that would not be blowing up on the front pages of major newspaper a year down the road, with calls in Congress to establish "Do Not Text" lists. This is called self-regulation, people. It’s how we avoid having customers sue us, governments regulate us, and competitors eat our lunch with an alternative that, ~gasp~ gives consumers what they actually want.

I know, I know, that takes discipline and the sacrifice of all that cash they can make today by charging customers for spam. So instead, we’ll get to watch this whole thing play out like it always does. I predict class action law suits emerging in 8-12 months. Major news coverage of Text Spam in 12-18 months. Calls for legislation in 18-24 months, just in time for the next major election cycle. And accurate tallies of all the money we’ve wasted beginning in 2 years. That’s when the investment will pick up in anti-text-spamming products. Buy your domains now.   

The Impact of MTV

A lot of people were talking about MTV’s big 25-year anniversary this week–though not MTV, since they don’t want to remind their 14-year-old prime audience that they’ve been around so long…

If you didn’t catch it, NPR’s Talk of the Nation did a great show on the meaning of MTV and it’s impact on society and culture. You can find a link to the story, with an audio file and lot’s of supporting information at this link. It’s well worth the listen. Two of my favorite snippets:

1. MTV, despite its name, has perhaps had a greater impact on society with its introduction of Reality shows, than its music videos–notwithstanding its music successes, including its service as a vehicle for rap to hit the mainstream, along with black pop artists.

2. MTV doesn’t age. Every year they spend a lot of resources researching their 12-18 year-old target audience and tweaking their content, such that every 4-year cycle of high schoolers will no longer resonate with MTV by the time they graduate from college. They of course have launched parallel channels to hold on to some viewers, but at the core, they have a single-minded focus on their primary audience.

There are some troubling aspects to MTV’s success, exemplified today by the disturbing implications of the runaway success of shows like "The Hills". But that’s another thread. What’s interesting to me, good or bad, is the ability of a media institution to have such a tremendous impact on our culture, and this is a decent overview by NPR.

Speaking of which, I’m quite impressed by NPR’s production quality. They make very effective use of the Internet to augment their stories, by adding useful supporting content and outtakes they can’t fit into the broadcast. It’s not the fluffy crap you usually find as extra material–like on most DVDs–but information that expands the experience. Great stuff.


Why Businesses Really Fear Blogging

Have you
ever noticed how it sometimes takes an epiphany to reveal the reality of an
obvious truth? Like, I don’t know, sitting in traffic in a $60k SUV burning
$3.50 a gallon and, even though you’ve sat in the same gridlock every day for
years, on this day you happen to notice the endless lines of single-occupant
vehicles, the single half-empty carpool lane, and for the first time it dawns
on you with sparkling clarity the breathtaking stupidity of modern life? Yeah,
that feeling. I had a moment like that yesterday. Not during my commute, but during
a panel discussion about blogging and digital media technology.

I was part of a panel for the Backstage Pass series of industry discussions at Pillsbury Winthrop in Palo Alto, moderated by Tamara Ireland Stone of Rainmaker Communications. Though the discussion was highly practical, focusing on the challenges and pitfalls of new information channels like blogging, I fell into my usual routine of veering off into the social and philosophical context of the debate. While it’s important from a business perspective to understand the immediate impact of disruptive technologies, I’m always interested in seeing the flow of the bigger picture—in this case, how the control of information is becoming distributed, how consumers are learning new skills to filter and process data, how businesses are having to learn how to shift from polished monologue to broader dialog with their audience.

The old
paradigm of corporate communications that businesses understand—the one-way
broadcasting of a tightly designed and controlled message—is giving way at an accelerating
pace to a chaotic and uncontrolled market discussion. Bulletin boards, chat
rooms, blogs and list groups allow consumers to share information and influence
public perceptions about companies and products, and businesses are quickly
being relegated to just another participant in the conversation. Some companies
are actively engaged in the discussion, some are trying out various schemes for
influencing the dialog, but most are just standing on the sidelines scratching
their heads.

So while we
panel experts were doling out our sage advice about how businesses can better
understand and engage the blogosphere it suddenly occurred to me why this is
such an immense challenge for so many businesses. I always just assumed it was
about control. Businesses want to minimize risk; control is a powerful tool in
minimizing risk; and the new channels of communication take much of the control
away from business. Panic ensues. But my epiphany was about something much more
obvious and fundamental.  

The advice
that has become standard among blogging experts is that any business engaging
in a dialog with their market must be authentic, open and responsive. You can’t
just hire a PR agency or a freelancer to write your blog—you’ll be defrauded or
disregarded, or both, in an Internet minute. Companies must put executives on
the frontline who can engage intelligently, responsibly and passionately about
what the company does. This is an obvious challenge for companies that have a
contentious relationship with their market, a hyper-secretive culture, an
impatience for dealing with questions, or a style of business that might not
stand up well under public scrutiny. But it’s also a serious challenge for
companies beleaguered by a far more common vice: uncertainty.

And this,
finally, was my penetrating revelation into the obvious. Why do so many
businesses fear the give-and-take dialog that is the currency of our new
communications technology? Not primarily because of the lack of control—that only
scares those who were good at controlling their image in the first place, an
elite few who are now engaged in tactics to control their image in the new
paradigm. What far more businesses fear is the lack of a consistent, cohesive
and compelling story–much less business operation–they can be confident in sharing and defending clearly to
win the hearts and minds of their market. After all, it’s easy to package, polish
and publish a perfect message for mass consumption. But to embody that message as a business,
to understand its meaning and its implications throughout every commercial function, to champion that message and to believe it, that takes something that most businesses just
haven’t spent a whole lot of timing working out.

The Tyranny of Long Tail Minorities

This just mystifies
me. Marc Gunther, a senior writer at Fortune, has just posted a column claiming
that the Internet has left us all poorer from the overwhelming glut of information
choices. The column is sort of a tangential review of Chris Anderson’s finally
released book, The Long Tail, which describes how business is being reshaped by
the growing viability of micro-markets—which essentially means that consumers,
in part by virtue of the Internet, can develop and satisfy all kinds of niche
desires instead of conforming to a mainstream taste dictated by the economies
of mass production. Instead of a mass market, The Long Tail argues, we’re
evolving into a mass of niches.

seems to think this is a sad kind of progress. After all, the fragmented
Internet, with its endless rat holes serving niche interests, is incapable of creating the kinds of mega-stars and ubiquitous ad
slogans that unify our culture into such a homogenous ideal.

“Think of
the feeling that comes a few times a year—the morning after the SuperBowl or
the Oscars—when tens of millions of Americans share a common experience."

I’m kind of lost about what the Internet has do with the common experience. I mean, did we all not share in Zinedine Zidane’s headbutt? It wasn’t only the talk of TV, newspapers and radio, but video clips and remixes have been plastered all over YouTube for days. But alas, according to Gunther, it is the Internet and its world of choices that is eroding the very fabric of our
national identity.

“I think
the explosion of choice has left us poorer in at least two arenas. The first is
journalism….Yes, there is more information available to us than ever, but I don’t
think we are better informed. Niche media will, inevitably, continue to weaken
mass media.

"The second
arena where we are worse off is politics. This is related to journalism, as the
moderate and responsible voices of the Mainstream Media get drowned out by
partisan, opinionated cableheads and bloggers. Politics in
America  has
become polarized for many reasons, but a big one is the fact that people can
now filter news and opinion they get to avoid exposure to ideas with which they

Choice is bad, because we get more information
we can choose ourselves rather than being spoon-fed
whatever the Wise Editors decide, and that
keeps us from being
well-informed. Because apparently, we aren’t smart enough to
figure out what information is worth reading, and we need other, smarter people
to tell us what to read, and big spectacles with stars and flashy ads to help bind us
all into a nicely pasteurized culture.

I’m hearing
a lot of this kind of argument lately, from people terrified of the uncertainty
of how our world is actually shifting with all of these new channels of communication. They always seem to arrive at the
conclusion that choice is somehow corrosive, instead of seeing it as a symptom.
Why do we all migrate so rapidly to a world of choices? Because what we’ve been
fed for so long in the mainstream SUCKS.

news pretty much stinks across the board. Where’s the reporting on Darfur? When’s the last time you heard about Afghanistan? Or a critical story about a major corporation that, ahem, owns a major network? Don’t even get me started on politics. Do you
have any desire to see who’s going to run for president in 2008? And that’s all
the fault of new choices available on the Internet? Give me a break. And here’s
a news bulletin: the Internet allows you to filter news and opinion to avoid exposure
to ideas with which they disagree. Interesting. I guess the masses of people who listen to talk radio, or watch Fox vs. CNN all day long are opening their minds to reasoned debate.

explosion in choices available via the Internet is a reflection and reversal of
the rise of mass markets during the 1950s. Some people are just tired of same
old mainstream crap, others don’t trust the sources of mainstream ideas and
information. The phenomenon of choice is not the problem, it’s a symptom of our
cultural and technological evolution. As time goes on, we’ll learn new
techniques for sourcing and sorting information, just as new powers will emerge
to bring certain channels and ideas into the foreground and galvanize larger audiences.

But hey, if
it doesn’t work itself out and we end up losing the kind of common cultural identity cemented by the
Oscars, the SuperBowl and catchy ad-slogans, I won’t be losing any sleep.

Rating Commercial Viewership

The advertising world is all atwitter over news today that Nielsen will
start offering viewership numbers for televised commercials beginning
with the new fall season. Using the same 10,000 set-top boxes they use today to measure the incredible consciousness-melting power of American Idol, Nielsen proposes to give the first accounting ever of just how many people tune out during the commercial break. Media executives everywhere anxiously await the dramatic fallout:

The Wall Street Journal reports that executives at both TV
networks and advertisers expect the new Nielsen ratings will show that
viewership declines noticeably when a program breaks for commercials.

Wait. You mean people actually change channels and go to the bathroom during commercials? You’re kidding. Advertising executives everywhere are shocked and amazed at this new development, not to mention outraged:


should go down," media buyer Bruce Goerlich, executive vice
president at ZenithOptimedia told the paper. "If I was a
buyer, I would be taking the stance of, ‘Quite frankly, what you said
you were delivering, you weren’t.’"

It’s shocking I tell you. Just shocking. (I love the "if I was a buyer" routine. Uh, hello Bruce. You ARE a buyer…) The only thing worse than the paper-thin positioning from advertisers and network execs is the utter lack of insightful reporting from some leading ad industry analysts. Many are rushing so fast to be the first guru to unveil their vision of the future they fail to see through the smoke and mirrors. Here’s one typical remark:

Either way, as advertisers see hard numbers that show their television
investments are even less accountable than they suspected, they will
begin to seek new outlets at a faster pace than they have.

"Hard numbers"? Where did anyone get the idea that Nielsen delivers hard numbers? The recent problems Nielsen has had justifying its ratings adjustment for Tivo viewers demonstrated just how much secret sauce they’ve been adding the ratings mix. In this article from MediaPost, Lifetime’s EVP of Research explains how Nielsen cooks the numbers:

"If important demos are underrepresented in
its sample, Nielsen frequently uses mathematical factors, giving them
more "weight," and raising audience levels ascribed to those demos in
its final ratings… …
Nielsen’s calculation systems are so complex,
especially since they’ve weighted people in the database so that a
person is not a simple person. A person is 1.1 on one day and 1.5 on
another day."

It makes sense. I mean, why waste money on quality programming to raise audience levels when you  can just use a complex mathematical factor? I suspect the same concept will work quite nicely for commercials. 

Google Testing New Ads

Google is testing a new ad format associated with it’s Google Maps service, as pointed out by the Search Engine Round Table. If you do a geographic search, little icons will show up on the map that identify advertisers close to your search location. For example, if you search "hotels san francisco" you’ll find a small icon with a bed near all of the generic pushpins. Click on the icon, and you see a "Sponsored Link" from the Mark Hopkins Hotel. Do a search on "booksellers nyc" and you’ll find an icon for a coffee shop, sponsored by Barnes and Noble. I did a little searching around on other cities and business types, and couldn’t find anything else, so it must be pretty early in the rollout.

Who’s Afraid of the Dark(net)?

If you haven’t been following the bubbling unrest over Digital Rights Management, now may be the time to tune in. The wrangling over how technology impacts copyright and fair use is picking up momentum on the edge of mainstream, and some interesting Web sites and undergrounds have emerged that are a good reminder of what creativity is all about. 

<Rant> Creativity is a social currency. It’s about reflection and inflection. Exploring and connecting through something deeply felt as a way of experiencing the present. Humor. Fear. Regret…. The capacity for creativity to transmit emotion, to inspire, to generate shared experience, is more powerful than any manufactured currency.  Which is why we use creativity in business as a vehicle to generate revenue. We use it in marketing, we use it in product development, and we use it most of all in entertainment. But Creativity has very short shelf life as a business currency. Business wants to be efficient, to strip away anything unnecessary, anything that isn’t calculated. Even businesses that code creativity into the DNA of their operations usually can’t avoid stifling it in some vital way, because ultimately the purpose of business is not to inspire, even if inspiration is an expedient tool.

Nowhere is this more apparent than in an industry of creativity. Movies. Radio. Television. It’s become a cliché to moan over the lack of creativity in entertainment today, even as we anxiously await another blockbuster summer with the likes of Scooby Doo 3, and a big screen version of Leave It To Beaver. Why is creativity so lacking where we expect to find it most? Because the structure that allowed the entertainment industry to profit even while it inspired–or that enabled it to inspire even while it profited–has changed. We can copy and share files. We can have 54" screens in our living room with high definition DVDs and video games. We can hang out on the Internet instead of watching TV. From a business standpoint, it’s chaos. New technology. New attitudes. How do you handle chaos in business? You either maximize your effectiveness at doing what you know best, or embrace change and move in a new direction. The relative risk is open to perception, but most businesses like to avoid change.

So now we have a media industry that is very poorly suited to adaptability. They’re using whatever tools and weapons they can find to prevent change, and to retain revenue–one of the biggest being copyright law. We have a record industry suing it’s customers. And now a movie industry threatening the same. At this point, at least in the entertainment business, industry is no longer serving creativity, and creativity is no longer serving industry. It’s a broken relationship that is no longer satisfying to anyone. People feel cheated by the quality of movies and records they buy, and the industries start losing revenue. Industry reacts with ever more draconian restrictions on how people can use content, and people react by finding new ways to get around the restrictions. Because ultimately, people don’t care if the industry is making money. They want to explore and connect through something deeply felt as a way of experiencing the present. They want to share that, and be part of a shared experience. If businesses can make money while that’s happening, no one cares. But businesses get in the way of it happening, they’ll ultimately lose. Because creativity is a social currency far more powerful than anything manufactured. </rant>

This pill will take you take you back where you came from, and you’ll forget everything.

This pill may lead to places you don’t expect.

New Advertising Model

I’m producing a pilot program for a startup company in the online advertising space called Hyperbidder, that will be launched at the Ad:Tech show in San Francisco in April. It’s an interesting model for advertising. Instead of buying ad space for a set CPM or CPC, you place a bid for ad space at whatever price you want to pay. At the end of the auction, the space doesn’t go to the highest bidder, it gets divided up and spread among all bidders in proportion to their final bid. That means any advertiser can buy space without getting squeezed out of the market, and the pricing is set by market demand.

What’s nice about the model is that it has significant potential to open up surplus ad space currently unsold by major advertisers, since the pricing model will put it within reach for smaller buyers. For the publisher, no potential revenue is lost because all bids win. And unlike the typical banner ad networks, where you buy ad space across a series of sites–usually without knowing exactly where the ad will land–there are metrics and mechansisms to not only see where your ad is going, but to control where it goes. 

I never stump for products, but I’m giving the background as an explanation for why an ad is now appearing on this site, down along the right hand margin. I’ll be lucky to earn a cup of coffee each month with that space, but it’s an interesting exercise on the front lines of the battle being waged in the online advertising market this year. Let me know what you think.