John Battelle also has a great column over at Technology Review that puts forward an idea called Publisher Driven Advertising (PDA). It is an alternative to the traditional approach to advertising where advertisers hold much of the power in the relationship between audience, publisher and advertiser. John argues that with the interactivity of the internet that an alternative economy is emerging that rebalances where the power lies in this interaction.
Of course the recent trend in online ads has gone to pay-per-click (PPC) which John argues is the first step to moving to a PDA economy. PPC represents a significant shift where ‘the advertiser pays only when the ad performs—when someone clicks on the ad itself. Second, paid search networks “disaggregate” advertisers from publishers—that is, advertisers no longer purchase space on the publisher’s site but instead pay for keywords.’
Battelle takes PPC a step further and suggests that the next move to PDA could be something like:
‘Next, imagine that, instead of buying into PPC networks or specific sites, advertisers release their ads onto the Internet….
Because an Internet-based ad is already a little piece of software, it can be tagged with information about its target audience, how much the advertiser is willing to spend to reach that audience (and how much each click will cost), what kind of websites are acceptable or forbidden (such as porn sites), and any number of other attributes. Most important, each ad could communicate with a “home” application that tracks its progress and status.
Once these tagged ads are let loose, publishers could simply copy and paste them into their own websites. Through connections to their home sites, the ads would report which publishers have pasted them where, how many clicks they’ve received, and how much money is left in the advertiser’s bank account. The ad propagates until it runs out of money. If it is working, the advertiser simply fills up the tank with more money.’
He goes on to suggest that it is weblogs that could be the key to such a system working.
As I read the column I find myself agreeing with much of the reasoning – but also wondering why it sounds so familiar. Then it struck me – in some ways what he’s suggesting is actually a fusion of what I’ve experienced in using Adsense but also affiliate programs.
In the case of affiliate programs like those run by Clix Galore, LinkShare.com and Affiliate Sensor (all of which I use on a variety of sites) it is the publisher who makes the decision about which companies, products and services that they will promote. The ‘advertiser’ simply advices (through a third party) what their conditions are (ie payment, products, banners etc) and allows publishers to grab and insert simple code into their sites.
The difference I guess in what John is talking about is that most affiliate programs don’t pay you for a click through, but rather pay you for a confirmed lead or an actual sale (and they usually pay you a little more than you’d expect from a click – although harder to get).
The main downside of what I’ve experienced of affiliate programs to this point is that they can be rather cumbersome to set up and implement. The advantage of most PPC programs is that they are fully contextualised. This means using a program like Adsense on a blog can be as simple as adding one piece of code to a template (which should ensure reasonably relevant ads on most pages), affiliate programs can be a lot more work for them to be as effective. To get the best results with them they usually require deep linking within your content, on a manual basis (to ensure their relevancy to the content) rather than just a one off placement in a side bar.