Monday, November 15, 2010

Looking for a new ads major paradigm shift (part I, where we are)

Search ads is the business of selling paid links, together with a short description of the destination sites. The price of the ads is decided by means of an auction where advertisers bid for position and pay just enough to beat their runner-up. When the user submits a query, a set of related paid ads are served together with the search results, and the bidder pays a cost if the ads are clicked (pay per click). For Google, this business has a value of about 5.8billions per quarter. Bing has a proportional business value. Probably, you are thinking.. I already know all this stuff, what is new? Nothing is new, I just want to analyze the above scenario under a different perspective.

We have hundreds of millions of users producing zillions of web pages, blogs, real time updates, and so on and so forth. Then, search engines index this content and serve search results, when users submit relevant queries. In addition, search engines serve commercial ads together with the indexed content. Now, why the content producers receive no money for their content? After all, if there no content then there will be no index, no search results and no commercial ads.

You may say ... well your analysis is partial since commercial ads are not the only way to monetize the content. Another element to consider is the traffic sent to the content producer by the search. Fair enough. This observation is certainly pertinent. However, receiving traffic is very much important for commercial sites, but is not necessarily the same of getting direct money.

For instance, say that I love the music of the 80s. This is my hobby, and so I write about it. I would be interested in receiving some traffic for content produced for this hobby. Anyway, I would be more happy to get some direct money anytime that my content is accessed by using a search engine. After all, the search engine has probably served some commercial ads together with the index built on the top of my content (and on the top of the content written by other similar content producers).

Nowadays, A similar mechanism is missing .. and I am not sure why? Would you consider it a new ads major paradigm shift? And could it be a pair with a new search major paradigm ?

1 comment:

  1. See next part here: