A couple of stories caught most of the Internet’s eye yesterday and today. Mark Zuckerberg’s dismal performance on 60 Minutes and the rumors about Facebook not buying Plaxo. Breaking it down, here’s what really happened:
1. VentureBeat writes provocative story about Facebook buying Plaxo, to drive traffic;
2. TechCrunch writes provocative and contradictory story about Facebook not buying Plaxo, to drive traffic;
3. Much traffic and ad revenue is had by all, except Facebook;
4. Google has last laugh.
As if called from the heavens, one of the Google ads that showed up for me next to the TechCrunch post was even for facebook/ads.
I don’t necessarily disagree with the premise behind building a vast community of users and monetizing later, but Facebook’s current trajectory seems to be helping other people monetize traffic by virtue of pouring rocket fuel on the hype bonfire. Even the staid old Guardian gets in on the act with an inflammatory story about the politics of Peter Thiel et al.
Is all of this excitement a bad thing? Of course not. In fact it illustrates just how much simpler and more democratic it is now than it used to be to monetize content with advertising. But what’s really interesting here is that the Facebook story highlights how relatively simple advertising remains. That is, associating advertising with content remains a fundamentally good approach, whereas delivering it within conversations and driven by profile data, so far at least, isn’t particularly effective.
Users who are interested in your content are predisposed to paying attention to the property that delivers that content; those seeking to communicate with one another are focused on one another. The best communication tools are transparent and intuitive, and as a consequence generally unsuited to the delivery of advertising messages.
So let’s hope the investment capital continues to flow into Facebook and the other sub-$1 CPM properties, so that the much simpler business of making money from content can continue.
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