The Democratization Of Online Advertising

In the earlier post, I talked about the “bubble” hype, and the reality from a money perspective; here, I’ll continue with the next driver that I see transforming Web 2.0.

I’ve written about the growth of online advertising, and the Long Tail element; here’s where it helps drive a stronger Web 2.0.

Personally, I don’t think that the pure ad supported model is one that any venture should rely on; because that requires achieving scale before you get to a sustainable position. And the pitfalls facing hypergrowth are so much more in a connected world. It’s easy to stumble, but not so easy to run up a tight rope. It’s much better to look at multiple revenue sources, with ad supported being just one.

Nevertheless, the strong growth in this revenue pool does provide opportunities to tap into, and keep the business funded and growing while building the service model and revenue streams that are more sustainable. The beauty of the online ad system is that it is far more equitable and worthwhile for focused offerings vis a vis mainline media.

My belief is that an increasing chunk of online advertising (Adsense and others) comes from non-consumer sources; businesses that find it viable to target customers through online ads, both from the point of view of lower entry & testing costs, as well as measurable returns on the expense. I’ve been looking for data or analyses that could shed light on this; if you know of any, please do share what you have.

If the only way to build a sustainable business is through multi-million Super Bowl ads a la Webvan, or a front page banner on Yahoo, there’s a significant barrier to entry and growth that businesses face. However, if strategic incrementalism can play a part, a few hundred dollars through AdWords getting you the traction to get on to the next step, and so on, the viability of the model is much higher.

Some years ago, Japanese style Kaizen was a buzzword; today, strategic incrementalism permeates Web 2.0 to such an extent that we don’t even think about it.