Ross Mayfield and John Battelle and Jeff Jarvis have been batting around a new mechanism for online ads.
There are two parts to the mechanism:
* the value of the ad is set not by impressions or clickthroughs, but by the amount of 2nd-degree influence — the size of the audience of the blogger’s readers who pick up the ad.
* the bloggers picks from a set of ads to display (or even, in Jarvis’ suggestion, make the ads).
It’s similar to an affiliate model (blogger gets commission from Amazon sales of book reviews), but different in that it takes into account the influence on the readers of the blog too.
This model blows up two core problems with traditional advertising
* there’s no demand for messages — advertisers barrage us with ads we don’t want.
* demographics are a blunt instrument for predicting preferences. The people I have most in common with aren’t necessarily identical in age or gender or zip code.
The question is how to jumpstart this model, given the notorious conservatism of ad buyers. A consumer products company launching a brand of car or soap is going to wait and see if this wacky idea pans out.
The good news is that there are some types of advertising that are brilliantly suited for this approach with minimal startup cost. This would be fabulous for a gizmo (cellphone/digital camera/music player) product launch — or the launch of any type of products that garners strong loyalty, is purchased by influence, and is already going to have online advertising.
It would be interesting to try for political ads — political bloggers already praise their candidates and advocate issues.
With Technorati, the metrics are pretty straightforward – a search and a little math on api results and you could easily do a payment grid. Experimentation is cheap.
Another really good thing about this approach is that it avoids the “pushiness” of flat-out viral marketing. It’s socially congenial to praise a product you like. It’s rather more obnoxious to send coupons to your friends.
Also, this approach avoids the phony smell of blogger advertorial. Remember the Raging Cow fiasco where Dr Pepper tried to get bloggers to endorse the new drink? An advertisement picked by a blogger is obviously an ad, not a hidden product placement. It’s aboveboard, not underhanded.
I wonder if picked ads would harm blogger credibility — would we respect bloggers less if we saw they were getting paid. My gut feeling says no — affiliate programs can be used with integrity, and this can too.
It would be great if music and movies used this approach, and the ad could include songs and clips. Independent artists and alternative distributors could use this technique. It would work for the majors, but they’re hell-bent on killing alternative distribution instead of using it to make money.