You’ve all read my take on the economics of advertising. Consumers supply time and attention to advertisers and should receive the money advertisers pay to reach them. I’m almost ready to pull the wraps off of a new business that aims to make this economic efficiency a reality. (please sign up to get more details)
A frequent question I get is “well then what happens to media companies?” There’s a simple fix too. You and I consume TV shows. We should be paying for the media that we find valuable and want to consume. Now before you shudder at the thought of having to pay for news and entertainment, remember, you’d be paying for it with a portion of the ‘advertiser stimulus payment’ you receive every month.
I was just reading in TechCrunch about a company that is looking to tackle the other half of this economic riddle. Contenture is looking to create an economic fix to enable publishers big and small to get paid by consumers for their valuable, advertising free content. Makes a ton of sense…as long as consumers have extra money in their pocket to pay for it.
Consumers get paid by advertisers for the time and information we provide to them. And then media companies get paid by consumers for the valuable content they provide to us. And an efficient market is born.
10 comments ↓
Let me get this straight.
Advertiser pays me to watch ads. I take that money to pay for ad free content.
So, in affect the advertiser is paying for me not to see their ads. So what is the benefit for the advertiser in your plan. Don’t advertisers pay for our attention with all of the great content we consume for free? In you senario, who pays for all the great content? Not the user. Not the advertiser, there is no incentive.
So what does the advertiser get when paying for a consumer’s attention? The right to show then a ad free of clutter? the right to call them on the phone, send then an email, what?? How does all this payment processing happen?
Sounds like this idea kills any form of free media. personally, I am glad to be paid in free content in exchange for ads. Like wise as a publisher this model works well, too.
Jonas…thank you for your multiple comments. I appreciate them and hope to discuss more with you.
I am a huge fan and believer in advertising, media, and of the power of consumers. The economics of it, however, are completely broken. Look at the 3 constiuencies…
Advertisers have insanely loyal media sales reps and consumers who don’t really pay attention. That’s backwards. They are clearly paying the wrong people.
Consumers are offered some ‘free’ news and entertainment (via $100 comcast bills etc) in exchange for thousands of dollars worth of time attention and personal info. I think most consumers, if given a choice, would take the money and choose which content is worthy of getting some of that money.
And media companies, despite getting all the loyalty advertisers buy and all the money consumers earn….still are going out of business because they have lost their cartel like hold on the supply of ad inventory. And this was happening before the economy sank.
No one is winning, because the middle man model is broken. If advertisers buy time and attention from the people who own time and attention (you and me) and consumers buy news and entertainment from the people who own news and entertainment, it all starts working again.
And consumers take their rightful place in the center of the advertising economy.
Thanks for reiterating your theory. I do agree that the system has flaws. I am sure most would. However, you haven’t offered a solution. Are you suggesting the mypoints model? If so, it’s been done and requires sales, marketing and PR to maintain. In fact, Cybergold, a company I worked for, had pattens on paying for attention
So, I get your theory. Got a solution that runs deeper than advertisers paying for attention? I’d like your thoughts on the mechanics. And I’d like to know what and advertiser gets to do with the attention they have purchased.
Also, your theory kills the independent publisher who will have a hard time competing for paid users with large media companies.
Hi Jonas. Interesting that you worked for Cybergold. I’d love to email with you if you are open to it. steinberger (at) gmail dotcom.
I know I haven’t presented the solution yet but i will soon. The industry has evolved quite a bit since the days of Cybergold. Most notably, ad exchanges and text links ensure that all inventory cal be sold with zero costs.
Please email me directly if you’re open to it.
Your last comment you said the exchanges are making selling inventory at zero cost . unfortunately this is not true. 1) the exchanges charge fees to use their services, there re ad serving costs, there are labor costs to develop and maintain the exchanges. How about the creative, is that free to produce? It is getting cheaper, but you still get what you pay for, cheaping out typically results in the crappy creative that caused you to start this thing in the first place. I a thinking you haven’t published you solution yet, becasue it is not as staright forward as you theory. Problem is that your theory is full of holes, which need to be plugged before any realistic solution can come about.
I like free TV. I like hulu.com and I want to rot my brain and I don’t want to pay for it.
Anyway I thought you said they are gonna pay me. But they can pay me, sure.
Love the debate, and the brave business model.
I don’t necessarily agree with Jonas that smaller publishers would be threatened if consumers were charged for content. As I see it, specialized and nano-local content will command a premium from consumers who will buy it from a knowledgeable source. ConsumerReports.org is a good example.
So are tiny weeklies who charge for Web access (metro dailies ignored so many regions that this model will flourish.)
It’s not that radical of a notion that consumers will be enticed to read and watch brand-produced advertising content — especially if there’s a dollar incentive being offered. Because information gathering is largely driven by search, consumer go to Google and the stuff that matches pops to the top of the queue. Whether it’s corporate-generated or crafted by a Pulitzer winner matters not to the vast majority. I ran the largest press release distribution firm for many years and attest to the fact that timely information is valuable — whether in the form of an ad, a white paper, a press release, a video or a newspaper article.
An important thing to consider, particularly for the little guys, is that there is no one with a gun to anyone’s head to use this model. This will not eliminate the ability to have free content on ad-based sites. I believe David is proposing a new model that would work in a addition to the existing one, not completely replacing it.
@ dave
consumer reports is hardly a small niche publication. it is a hugely recognized brand name that already charges for it’s reports and can command this as it is a very trusted brand built over many decades. And established metro weeklies? same deal.
I am talking about the small independent publisher, like me.
@mark this model already exists, so nothing new here. Many sites offer a paid sub with no ads or enhanced features.
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