It’s online advertising forecast season. EMarketer projects nearly 11% growth in US spending next year, to $28.5 billion, and double-digit growth out to 2014. Agency Magna Global is slightly more bullish, and it and big media buyer ZenithOptimedia compare online to other media growth very favorably. NewNet technologies are a new catalyst for building off of proven Internet media models, so we’ve got our own Modern Media Manifesto on how to capture this spending. Meanwhile, could do-not-track or anti-cookie legislation derail this potential gravy train? Or would some publishers be happy with contextual, rather than behavioral, ad targeting?
This Guardian interview with the head of Facebook engineering is interesting, and a little scary. If this is an accurate portrayal, it’s definitely a hacker culture at Facebook. Very small teams work on “several dozen to 100” mostly short-duration projects, with little in the way of formal oversight processes. Their project mix is 80/20 focused on features that will increase usage or grow the number of users, versus generate revenue or cut costs. Top priorities include mobile, infrastructure (server, database, development tools), and machine learning. Machine learning is critical to feed the algorithm that powers users’ news feeds, as well as for ad targeting and security – spotting spammers, etc. And Facebook is mostly a Mac shop.
Privacy isn’t just Facebook’s problem. The whole consumer Internet and media industry had better devise a plan for facing the privacy issues fast, or get ready to face serious consumer backlash and, perhaps worse, government regulation. Here are a few steps social media companies (and those leveraging their services) can take.
The news business is just one of many to see its entire value structure be steamrollered by the Internet. Today the journalism industry is still struggling through its Napster phase, in which creators are panicked to find their content stolen in droves right off the factory floor. (The Associated Press’ recent demand to be paid for every search result headline linking to its articles is reminiscent of music industry lawsuits against file-sharing college kids in the late ’90s. One almost expects Lars Ulrich to re-emerge and take up the AP’s cause.) It needs to find its iTunes phase, as the TV and movie industries are trying to do: the point at which people would rather buy than steal.
Social news-sharing site Digg is testing a new advertising model in which sponsors pay less the more popular their ads are. Digg Ads – which will flow through the site’s main content stream like other stories while being identified as sponsored — will allow users to vote their approval or disapproval of each ad and comment on it the way they do regular stories. Popular ads will rise to a prominent place on the page while unpopular ads will be buried. And, most interestingly, advertisers will pay less if their ads are popular. It’s the latest in a slew of social media sites to let users vote on ads, a practice that has the potential to replace the clickthrough as the standard metric in online advertising.