No Way But the Ad Way

May 26 0 Comments Category: TechObservations

Although online digital advertising grew 14% last year to nearly $26 billion, it’s still a limited pool. For most journalism businesses, whether content or aggregator, it’s the only viable alternative for now. Subscriptions can’t hope to meet costs, and events, though lucrative, only apply to a small swath of producers. Freemium and trial periods are still tied to subscription models. And for companies that rely on network effects, it’s a self-limiting scheme that only closes doors.

But advertising is changing somewhat. Ad spending in more traditional static ads is declining. And targeted display advertising is steadily climbing. Borrell Associates projects that by 2015, the market for targeted display ads will grow to over $11 billion, while untargeted ads will fall to $2.5 billion.

For companies, like ours, which provide a mechanism for users to both passively and actively cultivate a personal profile, this is good news.

The biggest caveat is making sure that consumer privacy concerns are addressed.¬†We plan to make sure users are not only aware of how we calculate their prioritized news, but also are made aware of how much information is shared with advertisers in order to pay their bill. It’s possible that a model in which users can pay to restrict what is shared with advertisers can eventually be implemented.

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