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Recent Silicon Valley events signal a revolution in how ad revenues will be generated to support the coming multitudes of news outlets 4/30/07

Posted by Steve Boriss in Ad exchanges, DoubleClick, Google, Online advertising, Right Media, Yahoo.
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Since current news outlets are “mass media” and reach very large audiences, each advertising contract these days is very valuable. So, advertising is typically sold by attractive, personable, service-oriented humans known as “sales representatives.” But, what happens when news outlets ultimately splinter into multitudes as news consumers seek the news that interests them most – news of family and friends (“social computing”), news that fits personal political ideologies, very local news, vocational and avocational news, etc.? As explained by Forrester’s Charlene Li, the recent purchases of DoubleClick by Google and Right Media by Yahoo suggest that advertising sales will begin to resemble a stock market, with innumerable buyers (advertisers) and sellers (news outlets) engaged in a frenzied pursuit of each other mediated by electronic services provided by companies like Google and Yahoo. This will remove the onerous costs of human sales representatives on micro advertising purchases. It will also reflect that the greater number of news media choices available, and the greater amount of information available about each, preclude the possibility that any single individual will be sufficiently knowledgeable to set ad rates that truly reflect supply vs. demand. So instead of news outlets setting their own rates, they will set limits on what they will accept, and the collective actions and wisdom of everyone participating in the news advertising marketplace will determine what each news outlet actually receives.

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