I get kicks out of seeing Arrington over at TechCrunch always trashing PayPerPost, a new startup that is based on providing an advertising platform that unites bloggers and advertisers. You can read my review of it here.
Anyway, as I was reading this Wired article on How Yahoo! Blew It has really screwed things up, the following paragraphs stood out:
At the time, the idea seemed radical, even offensive. Who would want results driven by hordes of sellers hawking goods and services? Advertisers would, as it turned out. Although GoTo never became a top-tier search destination, Gross and CEO Ted Meisel quickly saw that the big Web portals and search engines like AltaVista, Yahoo, AOL, and MSN would pay big money for GoTo’s auction-driven results. They changed the name to Overture in 2001, and by the end of that year Web surfers had clicked on Overture ads 1.4 billion times. Advertisers understood the value of being able to bid for juicy keywords. The ads would be laser targeted, and the results — clicks — could be measured precisely. The portals and search sites figured out that the sponsored links could be placed alongside a more objective set of search results. It was a brilliant way to turn searches into revenue.
Google saw the power of this approach and decided to grow its own. Engineers at Google took the concept of pay-per-click search results and in 2002 turned it into a smooth-running, money-printing machine called AdWords. The company developed an automated process for advertisers to bid on keywords. It also made the auctions more sophisticated so customers couldn’t game the system. Crucially, Google determined ad prominence on a Web page not just by the price advertisers were willing to pay per click — as Overture had done — but also based on how many clickthroughs that ad generated. As a result, Google’s system responded quickly to ineffective ads: They disappeared. Google also had a massive database that tracked which ads worked and which didn’t, information it could pass on to its customers to help them create better ad campaigns. By the time Google published its financial statements for the first time in 2004, everyone knew that the company had harnessed one of the great innovations of the Internet age
Initially, paid advertising on search engines was very controversial. Can we draw any correlation to this new marketing bridge that PayPerPost is leading? Does it matter that the old guard and the establishment doesn’t like it? Not really. In the end, the market will decide. If it works for advertisers, it will be a huge success.
PayPerPost might not be the winner, just as Overture wasn’t. That isn’t what is at issue, it’s whether or not this type of a platform has a future.
January 17, 2007 at 1:38 pm
As an advertiser, PayPerPost is going to have to provide some real value for the money. Right now that’s questionable. The big difference between paid blog postings and payperclick like Overture, is that one is easy to measure. If it’s easy to measure, it’s much easier to justify spending marketing dollars on it.
January 17, 2007 at 2:15 pm
Nice post Hash and you capture the essence of the issue beautifully: everyone in hindsight can make a determination on how good or bad an idea/platform is/was. This is what Google did, they saw that targeted advertising was a good idea and got on the bus.
I can’t help but want to play devil’s advocate though. There are still lots of bad ideas out there and we see them manifest themselves when first movers take them up and try to build businesses out of them. Examples you ask: well, how about pets.com, webvan and a ton of other companies not all of which were on the web.
Some platforms are just plain bad and I think that this may be one of them. I do not like the idea of paying bloggers per post since among other things, it muddies the waters about just what is motivating the blogger’s writing.
– Steve
January 18, 2007 at 3:34 am
In my mind I find it easy to draw a line between the two though it’s more difficult to articulate and is quite subjective. Firstly, I take issue with pay-per-post allowing non-disclosure. I know that this kind of thing goes on in traditional journalism all the time, but that’s the point. For me Blogging is different and special because it is supposed to reflect a personal or collective opinion that is not swayed by corporate allegiance. If we allow this kind of material into the blogosphere, we risk ending up as just another bunch of self-important hacks. The problem is that I think the success of the concept relies to a large extent on non-disclosure – I for one don’t think I’ll bother reading a post that’s there for revenue reasons alone.
From a completely different angle, I also don’t like the implications for seo, the feeling being that if the concept is widely popularised, then link popularity and related satellite content ibecomes a measure of ad budget rather than the strength of the subject.
I do have an overriding feeling though that this won’t become as pervasive as people fear. I think users will quickly learn to spot a paid for post a mile away and so popular bloggers will shy away from it as they will feel that it impacts their credibility.
You weren’t payed for this were you? 🙂
January 18, 2007 at 6:41 am
I’m tracking what all of you are saying, and I want to make sure you understand that I’m not claiming that PayPerPost is the answer. The point I’m trying to get across is that they are “first movers” in a new area of marketing platforms. Final implementation, and best execution might be by another company 2 years from now – just as Google did with the Overture idea.
So, I can agree on the non-disclosure thing (which they do require now by the way), and I can agree that using PPP on your blog might dilute its value for certain bloggers, I can still say that I think the idea is revolutionary.
Oh, and no, I was not paid to write this. I pretty much distance this blog from any monetization schemes. It’s already to cluttered and messy all on it’s own. 🙂
January 18, 2007 at 6:26 pm
Cluttered and messy, I don’t think so. You do such a good job with this blog exploring where “Africa and technology collide.” Africa is huge and so is technology, but you’ve got a knack for picking differences that make a difference.
I’m not sure I’d pay much attention to Pay Per Post if not for you. There’s a great blog called Indexed, which I think I discovered from you. I doesn’t seem to be coming up right at the moment but this http://indexed.blogspot.com/2007/01/i-do-believe-its-not-butter.html diagram reminds that we’re pretty skeptical about advertising and it relationship to the truth. Whether or not PPP takes off the many to many medium of the Internet is changing our relationships with advertising; really with companies in general, in ways that are revolutionary.
There are a couple of links off topic I might as well add here. sorry for the clutter and mess;-) Ethan Z linked to this article about mobile phones and banking http://blog.foreignpolicy.com/node/3131
And this article about a Zaghawa–French Dictionary http://bahaibeach.blogspot.com/2007/01/bahai-beach-37.html is something to pass on to your parents.