Simeon Simeonov

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Flipping the Ad Model: Consumer Choice == More Money

Online audiences can be segmented into ever smaller, better targeted, more engaged, higher margin groups

Talk to a grizzled broadcast TV exec and he’ll lament consumer choice: the choice of many cable/sat channels, the choice of spending time online or in front of the TV, the choice of whether to watch ads or fast-forward through them, etc. In short, consumer choice == less money. In the old TV world you’d make the most money if you could just turn all the TVs on in every household, tie people to their couches and prop their eyelids open. Hmm, I wonder why we’ve moved away from that…

To online businesses–both the majors and those serving niche content–choice is good and the Net’s ability to support infinitely many discoverable “channels” is the key enabler for segmenting the audience into ever smaller, better targeted, more engaged, higher margin groups.

The Holy Grail is true targeting at the level of the individual consumer. Lots of personalization + ad targeting tech has been built that more or less doesn’t solve the problem. The targeting groups keep getting smaller, the margins go up a little but the individual consumer remains an elusive target.

In the days of Web 2.0 and UGC, some have taken the low-tech approach of just asking the consumers themselves. The latest high-profile entrant is Flip, Condé Nast’s attempt to capture the disposable entertainment hours of teen girls. MediaWeek reports that teen girls will be able to populate page real estate with their own art as well as traditional branded images.

There are traditional banner ads in some parts of Flip, including on individual profile pages. But even on those pages, the girls themselves decide which brands’ ads will appear during the setup phase.

It sounds like a good idea. Our own WeatherBug has done very well with having users pick the sponsors of the free WeatherBug product. It’s a win-win. Users are happy because they can exercise choice. Sponsors are very happy because they only pay for users who self-select.

More Stories By Simeon Simeonov

Simeon Simeonov is CEO of FastIgnite, where he invests in and advises startups. He was chief architect or CTO at companies such as Allaire, Macromedia, Better Advertising and Thing Labs. He blogs at blog.simeonov.com, tweets as @simeons and lives in the Greater Boston area with his wife, son and an adopted dog named Tye.

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