Business of online media and blogosphere

At the Digital Citizen’s Indaba, I presented on the business issues of online media and the blogosphere, from my own experiences as a blogger and working as a media professional at the M&G Online.

Banner ads in online media are still relatively unsophisticated. The problem is that most online advertising models on media still resemble traditional media advertising models. For example, the advertising model in newspapers has merely been transplanted to the web, without really adapting the model to suit the web environment.

So it’s no wonder that a “successful” clickthrough rate on a campaign is around 0.3%. In fact, most banner ads are terribly “web 1.0”. There is still so much wastage and hit and miss (much like advertising on traditional media). The question I have is what about the other 99.7% of your users that the ad had no effect on, or at worst irritated them. The web allows us to target advertising to make it relevant and useful to readers, so why aren’t we doing this? The banner of the future will be profile based (on registration data) and have a more sophisticated understanding of who it is serving too.

In many respects Google — the world leader in just about everything online (except social networking 🙂 ) — has shown us what a web 2.0 advertising model looks like in their Contextual Search Advertising models such as Adsense. So clearly online media has a way to go.