On-line ad revenue, an untapped jungle

Tom Dougherty, CEO – Stealing Share

13 July 2009

The challenge of on-line media. Who pays for it?

Apparently media moguls have gathered at Sun Valley Idaho this week to make strategies and plans to increase advertising revenue.

The big challenge facing them today is to figure out how to get revenue from viewers of on-line media (like YouTube). They are trying to sort out if the media and/or content gets paid for by subscription (as if anyone is willing to pay for anything that comes to them on-line) or by advertising (as if anyone actually pays attention to on-line advertising).

Do I have the answer? No, I do not. But I do know what the problem is and that is at least a start.

The problem is rooted in an understanding of the value equation.

You see, value is directly linked to something’s intrinsic scarcity. The harder an item is to get or possess, the more valuable it becomes.

The problem with media today is simply overloadtoo many choices (most of them bad) and too much of  second-rate content.

So, why should the viewer be willing to pay for things that they have been getting for free? Why should the viewer really pay focused attention (which is how advertising works) to content and programming that is so mundane and commonplace that it lacks all sense of urgency?

Media companies need to address a couple of issues if they want to make money going forward.

  1. How do they increase value by fostering scarcity? This seems to me to be the antithesis of Time Warner Inc’s “TV Everywhere” and Comcast Corp’s “On Demand Online”
  2. How can they make their programming more important so that we actually pay rapt attention to the content and therefore pay attention to the marketing messages that accompany it?

If the solutions were easy, they would be, as Napoleon once said, the providence of mediocre minds.

See more posts in the following related categories: Advertising Online advertising Time Warner Time Warner Cable

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