Jul 28, 2004

leaky patterns and fragmentation

Danny O’Brien, in one of his fantastic, impressionistic posts from OSCON, notes the information inherent in AdWords pricing: “if anyone was wondering, when [Tim] O’Reilly showed that book sales almost exactly matched the relative cost of adwords in for those keywords, it was me who very loudly went ‘woah!’. Information wants to be smuggled out via leaky patterns.”

Market realities reflected in the price of keyword advertising; makes sense. Attention is attention is attention, whether it’s the cost of an ad in a primetime slot on a major television network, or the cost of a text ad alongside search results for a widely-used programming language. The difference between the Google network and the television network is the direct connection on Google between the ad and its context (the search result). Thus, the correlation between ad prices and book sales for O’Reilly. Almost by definition, out of context ads can’t signal much to the market: it’s impossible to correlate the sales of automobiles to the price of the ad slots they’re purchasing on The Apprentice.

Stating the obvious here, but in a world of ever increasing attention fragmentation[1], more and more advertising / marketing / attention-based commerce will necessarily be conducted “in context.” Search marketing, keyword ads alongside gmail messages and product placement in television shows are just the beginning. Transparency in market pricing will follow. (Thought experiment: how would market transparency for attention pricing work in a deep product placement / promotional vehicle like The Beast (aka the A.I. Web Game)?)

[1] I’m determined to avoid the phrase “media fragmentation” since the Media Business is anything but fragmented. The Clear Channels, Viacoms, News Corps and AOL/Time Warners of the world ain’t going anywhere anytime soon. Plus, the central point isn’t about the media business fragmenting, it’s about the fragmentation of an individual’s attention – expanding from the tube to include games, the web, IM, email, DVDs, blogs, etc.