Assumptions: Make an Ass of U and Me?

It is broadly assumed that advertising is the financial underpinning for Web 2.0 business, and while that strikes me as true in general, web publishers, especially Mini Media types, may have oversold themselves on this notion, and may need to adjust their business models accordingly.

The exuberant expectations for online ad growth are encapsulated by this item which predicts “a train wreck of a week for New York City” because of the scheduling of three competing conferences presumably aimed at the same folks. Similar overcrowding must be occurring in every media niche, as ambitious folks aim at similar opportunities, assuming they will survive and their competitors will become extinct.

But what if the web ecosystem is not quite what we assume? A recent speech by Lincoln Millstein, director of digital media for Hearst Interactive, suggests some changes of concern to web publishers, especially the little ones.

“We are not in a huge audience growth space like we were five years ago,” Millstein says. He discusses how advertisers with branding campaigns “want to know where (their) ads are going.” ( Sound familiar ?) He relates hearing a marketing exec from Weight Watchers say the firm could not get the “reach” to hit its target audience online and “had to resort to buying TV.” Millstein notes that branded web sites, citing Yahoo, are starting to get concerned about having the “inventory” to handle future demands for ad space.

Here’s what I read into these remarks: what’s going on is a flight to quality. There may be more ad money flooding onto the web, but perhaps it’s all trying to buy the same stuff. It seems likely that an ad spender experimenting with online will be more likely to go with branded sites they know and trust. If this thinking is correct, it could complicate prospects for small publishers who are hoping to tap into ad spending by signing up with affiliate networks.

Millstein notes that direct sellers — click on this to buy whatever — may not care where their ads go. But as I’ve don’t buy online even though online ads may have instigated their eventual purchase.

The upshot is that small web publishers may get hit with a double whammy: big ad spenders may avoid their sites, and consumers may not support them by pursuing click-thru opportunities at the point of impulse.

I’ll have some thoughts tomorrow on how Mini Media publishers might adapt to this, but first let me disclose that, as a reporter for the San Francisco Chronicle, I am also a Hearst employee. However, this blog and its conclusions are my own and I chanced on Millstein’s comments by scouring the web.

Tom Abate
“Cause if you ain’t Mass Media, you’re Mini Media.”