Monday, January 31, 2011

The Internet Ad Model Problem

A couple of months ago, Forbes was caught tiptoeing beyond editorial standards when it introduced AdVoice, a sponsored blog that is designed to better monetize Forbes' internet property. In that article, I touched the difficultly of monetizing the advertising model on the internet.
But the root of problem goes deeper. The challenge to monetize internet properties is constantly getting more difficult, resulting in entities like Forbes to experiment with giving advertisers more. Consequently, some entities will walk an ethical tightrope trying to survive online.
Faced with the exact same problem, Facebook is rolling out a new advertising platform that turns a friend "Like" of an advertiser into a paid advertisement on the page. Michael Lazerow, CEO of Buddy Media says "anything that lets brands amplify social action or word-of-mouth is a great thing."

However, as low CPM's and generally poor ad performance might reflect, users would argue that a lot of internet advertising diminishes the overall experience.

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