Pixel Envy

Written by Nick Heer.

The Future of Digital Advertising

Frightening post from Ben Thompson, framing both yesterday’s Verizon-AOL news and Facebook’s Instant Articles:

There’s no need for me to dwell on the Facebook news; I covered it at length in March in an article called The Facebook Reckoning. In that piece I noted a significant problem with Internet advertising: ad inventory is ever-increasing, which means the rates for an undifferentiated ad spot are ever-decreasing; the best way to combat that trend is through better ads, better placement, better targeting, and better measurement.

[…]

This is why the deal makes so much sense: AOL provides the technology to target individuals instead of content, and Verizon the ability to track those individuals — at least the over 100 million customers they already have — at arguably a deeper level than anyone else in digital advertising (for non-Verizon customers, AOL’s ad platform is still useful, albeit not as targeted; rates would be commensurately lower). The talk of this mashup joining Facebook and Google to form a “Big 3” of digital advertising is not unrealistic.

I certainly hope it doesn’t play out like this.