(2008-02-28) Dyson Ad Revolution

Esther Dyson sees a coming WebAd/Advertising revolution. New players are emerging to devalue the spaces that the ad giants are currently fighting over. Companies you've never heard of called Nebu Ad, Project Rialto, Phorm, Front Porch and Ad Zilla are pitching tools to Internet service providers that will enable them to track users and show them relevant ads. This approach (called behavioral targeting and already in service by ad networks that track users through so-called tracking cookies) undercuts traditional online publishers, who employ content to lure users and to sell adjacent ads. Now, the ISPs can sell advertisers direct access to the same users. (where the heck does an ISP get a chance to show an ad? wrapping the browser?) She's expects adoption of this in Social Networking: I'll "friend" British Airways, which will say, "We see you're going to Moscow next month. Why not fly through London and we'll give you 10,000 extra miles?" I'm no longer in a bucket of frequent travelers, my privacy protected. I'm an individual with specific travel plans, which I intentionally make visible to preferred vendors. British Airways, of course, will pay DopplR a handsome sponsorship fee to be eligible to be my "friend" (just as a Nike rep might pay to sponsor a basketball game and be part of the community)... This does not mean that traditional online advertising will go away, just that it will become less effective. Value is being created in users' own walled gardens, which they will cultivate for themselves in real estate owned by the social networks. The new value creators are companies - like FaceBook and DopplR - that know how to build and support online communities. (Contrast that with current horribly low Click Through rates at FaceBook.)