Ever heard the rhyme, water, water, everywhere but not a drop to drink? That’s the upshot of a Wall Street Journal piece that reports a “shortage” of ad space at top web sites. “Absolutely absurd,” retorted Jeff (BuzzMachine) Jarvis — who is the same time correct and yet naive. Big ad buyers are in a panic. The Internet is “hot.” They don’t understand the medium (as I noted yesterday). So they rush to buy the same 10 sites everyone can name. It’s herd instinct. To the millions of overlooked destinations all I can say is: be patient because the market is moving your way.

Here why. The best advertising helps us make decisions. We value the recommendations of friends or associates. New market research from Intelliseek supports this observation. The firm surveyed 660 online consumers for its “2005 Consumer-Generated Media (CGM) and Engagement Study.” Among other finding:

“Word-of-mouth behavior among –familiars’ trumps all forms of advertising and is more trusted than news or –expert commentary’ … positive word-of-mouth from a personal acquaintance carries just as much impact as negative word-of-mouth … The advertising landscape is changing, forcing marketers to broaden and redefine the concepts of media, influence and audience reach,” said (Intelliseek CEO Mike) Nazzaro. “If consumer-generated media is in fact the most effective and trusted form of advertising, it’s critical that marketers begin to measure, manage and influence it and, equally importantly, heed the consequences when consumers turn the message against brands.”

I hope Nazzaro isn’t holding his breath because while I believe Intelliseek is on the right track, at this point in time large institutions are panicked. They have big budgets. They do things in a big way. So they are throwing big bucks at big sites. They haven’t had time to grasp that the ultimate shift in new media is away from the mass audience to millions of mini audiences (that, of course, is my whole shtick). Nor do the big ad buyers have the tools, outside of Google AdSense and possible competitors from outfits like Yahoo, to disperse their large budgets among these disparate sites. So the big buyers are competing to get positions on the name-brand Web pages, which are able to raise rates! What an enviable position.

This cannot last indefinitely. Ad buyers surely understand and resent this dynamic. As new market mechanisms allow them to funnel their large budgets through intermediaries such as blog networks, ad buyers will start to distribute their dollars among the mini markets, created by small publishers, that will more likely than not deliver better results by delivering a stronger affinity between the site and the audience.

I think in metaphors and the one that comes to mind is the difference between watering the garden with a hose and installing drip irrigation. It’s easy, even therapeutic, to come home at night, pop a beer and turn on the hose. But it wastes water, and can encourage the growth of weeds and fungus. It takes planning and investment to install an irrigation system. In the long run, however, it pays off. I just hope small sites can survive without water until ad buyers decide they want to quit getting hosed.

Tom Abate
MiniMediaGuy
‘Cause if you ain’t Mass Media, you’re Mini Media