April 14, 2009

Advertsing and virtual goods

Some articles that caught my eye among all the blog posts in my RSS-reader in the last week or two.

Futuristic Play: Stealing MySpace. Andrew Chen is back as the greatest tech blogger. Must read for anyone who wants to talk about advertising on social networks like Facebook and Twitter. Good comment on search monetization in the comments, as well.

Plus Eight Star: Virtual goods in Asia: it’s even more than you think! (25 times USA?) "We’ll try and clarify what is actually going on in Asia with virtual goods, and how we evaluated the market at 5 billion USD". Advertising is a big revenue opportunity in the western world, but there is a lot of money in figuring out how to get paid by users. Trying to get paid for access to commodity information is not a good strategy.

Futuristic Play: Will social payment platforms really work long-term? (Guest post by Jay Weintraub). "The not so eloquent answer as to why they won't die comes from the world the world they mirror at some level - the good ol' incentive promotion space. It is an industry that just won't die, and it continues to morph as the audience and traffic sources change. If it can survive, how is it that the offer platforms, with their much higher intent, would not?"

Lightspeed Venture Partners: More ad networks or less? "One trend reversal we saw was in the concentration of spend amongst the top five ad networks dropping to 62% from 76% in 2007. A few things contributed to this change in direction. The first is a rise in spend outside the U.S. and the development of branded networks such as Forbes, Turner Entertainment and Fox Audience Network, and the move of many premium advertisers away from general networks. Additionally, the rise of specialty vertical networks like the community sites BuzzLogic, Six Apart, Lotame and BlogHer has further fragmented this category and put a refocus on testing the emergent opportunities." Big publishers are smart to build their own ad networks (if they chose to sell low-priced ads that get little value-add through targeting).

Bronte Media: Newspapers: A Failure of Ambition."The newspapers missed the boat on eBay. They missed the boat in not becoming more aggressive in online classifieds in all categories. They missed the boat in trying to create Wikipedia-like resources on everything in the local community. They missed the boat on creating Citysearch/Yelp/Zagat for their local markets. This missed the boat in going deeper on coverage and stats on things like local sports. And so on and so forth.

In each case, the company lacked ambition or desire despite having huge profit margins to help them experiment and enter those markets. And it's not even as if they recognized they lacked ambition and paid out huge dividends to share holders. No instead they built skyscrapers and largely acquired other companies just like themselves. They quite simply lacked ambition."

New York Times: Consumer Spending: Look Out Below. Great chart on how borrowing against one's house drove U.S. consumption growth a lot 2000-2007.

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