Go Fish...

Congratulations online advertising! Welcome to the mainstream.

Dave Winer: “$15K wouldn't have met their reserve, and I wasn't comfortable telling them that I was interested in advertising (not sure why), and $40K might have been too much to pay.”

What Dave is worrying about is an absolutely natural part of the evolution of the market – the cross-over into the mainstream. I suspect that if the the adoption curve for online advertising was plotted out, you would see that there are a ton of expert buyers (early adopters) who are snapping up cherry inventory at pretty low prices because they are all working with a commonly agreed set of metrics and shared value system that make it easy for them to make a purchase decision. Dave, easily part of the mass market, doesn’t have access to that same highly developed dataset and no accessible way to tap into any credible expertise. But, he has completely bought the early-adopter story that online advertising does value that he can benefit from. In other words, as a matter of faith, Dave knows that buying ads is A Good Thing™, but he has no idea how much he should pay for it.

As a result of this imbalance, Dave - and the rest of the mainstream buyers – are all chicken-shit right now.

The only way to change this is to ensure that regular buyers like Dave (and me and probably you) have access to the same metrics and shared values that the experts do.

This is what Apple did.

After companies like Diamond and Creative broke ground with the early adopters in the MP3 player market, Apple analysed the learnings and realized that there weren’t any devices that bridged the gap between what the early adopter thought was cool, and what the mainstream wanted. With iPods, the magic sum boiled down to features, convenience and availability. With online advertising, I suspect it will come down to trust in the form of understandable valuation data and credible comparatives. i.e. hearing from a trusted source that the advertising on RocketBoom is expensive, but compared to a similar placement in Google’s Adsense, worthwhile.

Today, online advertising is a lot like the average online poker tournament where a bunch of players who don’t understand pot odds and expected value get fleeced by a bunch of players who do. I predict that you will shortly see Mike Arrington profile a startup that promises to level this playing field and change the dynamic of the entire market. Instead of a bunch of sharks playing an inside game of poker, you will quickly see schools of advertising newbies playing the world’s biggest game of fish.