The Coming Death Of Advertising Based Business Models

 

Advertising based models are doomed to fail.

Because smart companies are becoming their own media companies.

Wal-Mart gets it.

Nike gets it.

Even Scott Karp.

Smart companies are taking their story directly to the public and eliminating the media.

Even some in the advertising business are saying they have to be in the entertainment business to get their customers noticed.

So if you plan on financing your business venture by selling ads then you are dead.

As a doornail.

The future is in the devil's candy

You have to make the advertiser a part of the experience if you want to thrive. 

Here's the deal.

Smart advertisers are not buying eyeballs.

They are buying engagement.

And engagement happens to happen regularly when people are entertained.

Everyone hates ads.

Everyone.

They aren't relevent.

They are someone trying to part you from your money.

But when a consumer is engaged it makes him/her want to buy as part of the experience.

Think Junior Mints in the television show Seinfeld. They became a part of the experience.

Which means that you, as a creator, have two choices.

Either create an experience for your product

or make people pay to use it.

Explore posts in the same categories: advertising, big business, branding, candy, content, DEAD, salvation, Web 2.0

21 Comments on “The Coming Death Of Advertising Based Business Models”

  1. Adam Elend Says:

    I’m sorry I’m commenting like mad on your blog today, but I couldn’t agree with this post more. to quote myself a few days ago:

    “…Online advertisement is more about the extent to which your ad is integrated into the behavior or context of what the user is doing online (which is why search advertising is so effective). The logical extension of this is that providing valuable content is the absolute best way to integrate your ad into the behavior or context of your user.

    If you are the context, then trying to match what the user is looking for becomes irrelevant – they’re looking for you! Similarly, if you’re providing the tool that the customer is using, you are facilitating their behavior…”

    http://queensboundseven.blogspot.com/2006/04/one-for-road.html

    And with that, I’ll quit stomping around your comment section and go back to work!

  2. Liz Strauss Says:

    Adam said the magic word “context.” Content is no longer King without context–advertising or otherwise. Everything needs to give me a reason to engage with it. Because, quite frankly, there’s too much everything.


  3. […] The Coming Death Of Advertising Based Business Models The Coming Death Of Advertising Based Business Models April 26th, 2006 by chartreuse Advertising based models are doomed to fail. Because smart… […]

  4. joe Says:

    How much more exciting can you get? The cusp of a revolution that will finally break the stranglehold of media on the communication of truly interesting things to the public. Bye bye Dan Rather, and all those insipid, bloody morning shows on TV that cram total bs down your throat, dressed up as expert advice. “Should you hire a Life Coach?” Give me a break.

    How about just getting a life? Bring it on. We know we know.

  5. Andy H Says:

    I call BS. I think this sentiment may hold some water with more traditional (unmeasurable) advertising mediums.

    As far as online advertising goes — *ahem* — Adwords and CJ are efficient marketplaces, where both the advertiser and publisher are making good money on something completely trackable. I don’t need to create much of an experience to sell a mortgage lead that I got from one of my web sites.

    But then, maybe I do. The ads the convert the best start the interaction with the lead on my site and finish it at the merchant’s. Now I’m just arguing with myself. Is this type of thing what you were refering to?

    *prediction* affiliate marketing will overtake the contextual CPC model.


  6. Wall street is in ove with the advertising/internet model again so until that changes, crap is being floated on the hopes of building community.


  7. By the way – excellent post.

    We take it seriously at GolfNow.com

  8. chartreuse Says:

    Andy,
    That’s exactly what I am talking about. The key is to make the sale a part of the entire experience of your site. If it’s just an addon then you’re finished.

    And you’re right about affiliate marketing, too.

    That’s 2 in a row. I suggest you think about retirement!

  9. Andy H Says:

    > The key is to make the sale a part of the entire experience of your site.

    That’s certainly what converts the best, and makes the most money.

    Of course, the term “whoring your content” comes to mind… it is a fine (impossible?) line to do this and still keep the trust of a reader.

    [I get around this by making sites built for transient visitors… who cares if they come back… as long as the convert!]

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