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In the Internet advertising world today, there is buzz, and then there is money. Buzz is what we see with the latest Web 2.0 site that seems to offer something cool, one that looks to makes it's return sometime in future. Buzz sites ranges from innovative ways to capture ad dollars to making real the notion of micropayments. Money, on the other hand, are all those companies that have figured out how to generate returns, month in and month out. And when you look at the direct response world, none of the companies fall into the Buzz world. Then again, they can’t really, as they only make money when an action takes place. Their luck of buzz has nothing to do with a lack of talent or ingenuity. In the end, it comes down to a mindset difference. Buzz wants to solve tomorrow’s problems, and in the case of many Web 1.0 companies, they solved them too early, when scale wasn’t there but costs were. Money, on the other hand, it wants to operate in a world of certainty, of numbers and analytics.
Those who fall into the Money side of the online advertising world share the pursuit of quantifiable financial gain where they can control the returns and leverage their willingness to take risk. Outside of that, those in the category range widely. I thought it might be fun, and ideally somewhat interesting, to try and categorize some the archetypes that drive pay for performance today. They all make money, but some do it better, more scalably, and more honestly than others. There are probably more than the four types listed below, but the four I’ve chosen include: Opportunists, Evolutionists, Incrementalists, and Developers.
- Opportunists – every industry has them, and inside of us all there lurks this desire, the one that wants to know how to make a buck. The opportunists, in the online advertising space today, are those who follow the money with an almost absolute disregard for the future; their strategy is simply to change and morph and dig a new well once the existing one has run dry. They tend to get in early to different channels and often prove the viability of a channel for others. Unfortunately, in the case of email and adware, these same people also did their best to destroy it. Opportunists know how to make quite a few bucks, but if they have one downfall it would be using marketing tactics that only benefit them and do not provide enough user value in return.
- Evolutionists – whereas opportunists simply jump from one to the next, the evolutionists change their practices over time. Some of them might have once been opportunists, others just diverged from one business into another. I think of the broker who decides to build technology and becomes an ad network. I think too of people who might have started out in one area – bulk email for instance, only to end up creating a highly profitably and trafficked networking site. These are people that decide to leverage their talent to create a new, better version of themselves (not just a new version that operates in a different area like the opportunists).
- Incrementalists – some groups of people do change over time, but rather than make a radical change, they take it one step at a time; they might end up in a place very different from where they started, but they did it in smaller steps. Any one step to the next most likely seems only minor. The incrementalists do things in a measured manner, one change then the next. They tend to operate in established channels and move small steps at a time because they invest using what is in essence working capital. They aren’t necessarily conservative, only fiscally.
- Developers – the last group shares more in common with the Buzz than they do with many of the other types here. The developers go for the gold; they swing for the fence every time at bat. They approach the industry with the intent to build something that only time and money tends to buy. They, more often than not, start with some financial backing, and even as startups they feel like the structured companies they ultimately become. The developers will fail more often; they spend upfront time on a gamble, but when it pays off, the result is a company with a distinct advantage that others cannot touch.
Companies and people will often embody more than one type or they will move from one type to the next. In the end, the above list simply tries to capture the diversity of companies in the space today and show that you can make money many ways.
Jay Weintraub
Director of Market Strategy
Revenue.net
http://www.revenue.net
e: jweintraub@revenue.net
http://www.repvine.com/members/jayweintraub/
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