Ads want to be free: the battle for social media advertising channels

As some of you know, MySpace banned the video-sharing widget Revver from its pages early last year. Revver, a smart little company which seems to have a durable business model, distributes user-created videos sandwiched by ads. Apparently, though, MySpace isn’t up for allowing any advertising on its pages, other than those which it manages internally. And despite Revver’s willingness to deal MySpace in for 20 percent of its ad revenues, Revver got bounced from the MySpace empire. When it comes to ad channels, MySpace doesn’t share.

This is all well and good for MySpace, but it’s futile. While MySpace can rule its walled garden as long as it likes, advertising content is going to migrate wherever people are–and that means blogs, smaller media sites and other “long tail” venues that it can’t control.

One prime example is the widget-based ad serving technology created by Clearspring–a company backed by no less a set of luminaries than AOL founder Steve Case and leading light Ted Leonsis. (Full disclosure: I’ve had some professional discussions with this company–though I’m not on their payroll!) Clearspring has still managed to remain in MySpace’s good graces–as well as Facebook and other major media sites–but if the social media sites decide to stage a lockout, Clearspring can just as easily take its bat and go home. After all, when you’re widget-based, you can serve ads to a million blogs as easily as you can across one sprawling site.

Meanwhile, you’ve got companies like Lotame (and probably, others I haven’t heard of) which offer a platform allowing advertisers to deliver social media-based advertising based on users’ behavioral and demographic characteristics. That, too, can work outside of the faery realms of MySpace and Facebook, though it may be easier when you’re working with data aggregators like the big portals.

Look, when Web advertising first became a legitimate concept (in say, 1994 or 1995), advertisers clung to giant portals at first, spread out to vertical networks, and ultimately realized that personalized, user-driven content was the key. (That lead to keyword-driven advertising, of course, but that’s a whole ‘nother story.) All I’m saying is that clearly, the big social networking sites aren’t going to own the whole social media advertising pie for long. In fact, it’s already slipping out of their grasp.

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One response to “Ads want to be free: the battle for social media advertising channels

  1. Interesting to see that ad networks and content syndication is fragmenting out of the portals and into smaller sites.

    Now, the question will be how to value those ad impressions. Will it be a straightforward conversion from existing methods, or require new thinking?

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