Dueling Headlines On The Online Ad Market: Half-Full Or Half-Empty

from the depends-on-who-you-read dept

I just saw a bunch of headlines fly by and the contrast in them seemed worth noting. Here are just a few, with a brief intro based on whether it's a glass half-full headline or a glass half-empty headline:

• Good News!: U.S. Online Advertising Up 15.2%
• Bad News!: US Online Ad Growth Slows in 2008's First Half
• Good News!: Online ad revenue strong first half of 2008: What about the second half?
• Bad News!: As we fill tanks, growth in Net ads slows
• Good News!: Search-ad revenues grow amid market malaise
• Bad News!: Online Ad Growth Declines in First Half 2008
• Good News!: Internet marketing sees "incredible" spending increase

The most accurate may be from the AFP, who notes: Internet advertising revenue up but slowing, and the LA Times: Internet advertising grows slightly, but analysts worry about the future. Basically, the numbers are still up but at a slower pace than in the past. How you interpret that, apparently, depends on whether you're fundamentally an optimist or a pessimist. It seems pretty clear that there's still plenty of money heading into the online advertising world -- and it was going to plateau at some point. You can't keep up ridiculous growth levels at all times, especially when the broader economy runs into trouble. Plus, the fact that a healthy percentage of online advertising was tied to the mortgage/loan/financial services industry -- you'd have to expect some slowing of growth. No matter what you believe the future holds for the online ad market, you have to admit the juxtaposition of headlines is rather amusing.

Perhaps much more interesting, however, is this analysis of what happened to the advertising market during the Great Depression. It found that while some companies shied away from advertising, the ones that did well focused in on more effective advertising, which worked wonders. So the advertising market itself didn't collapse, it just got more focused, and those who used it wisely ended up doing quite well.

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It's Not Internet Pessimists vs. Internet Optimists; It's Simply Reality

from the the-market-is-changing dept

Adam Thierer has tried to categorize a bunch of different book authors and internet "thinkers" into one of two camps: internet optimists and internet pessimists. I'm somewhat surprised to be included among the optimists for a few reasons -- not the least of which is that I'm surprised to see my name included with a lot of folks who are a lot more prestigious. I don't belong in such a group.

That said, I'm a bit torn about the overall chart. I am optimistic about what new technologies and innovation allow, but I hardly think of myself as an idealist -- and tend to agree with Adam that things like wikis don't solve everything, and that we haven't reached a post-capitalist world where traditional means of production are passe. However, perhaps I'm misreading some of the other "optimists" on the list, but I don't think anyone really believes that either. As I've pointed out in the past, none of what we talk about here is about any fundamental change or shift in economics. It's the same old economics that has applied for ages. It's just trying to explain how changes in technology impact those economics.

So, I agree that it's silly to think that peer production completely replaces professional production means, but that's another extreme scenario that I don't think very many are actually pitching. Instead, the point that they're making is that peer production models will also enter the market, meaning that traditional business models will face some competition. It doesn't mean that one wins out entirely over the other, just that it may force some models of production to adjust to the reality of the market. I don't necessarily think that's an optimistic viewpoint -- it's just a realistic explanation of what's happening. While some pessimists may not like it, they're basically just whining for a different world that doesn't exist any more, and don't like the fact that they can't continue to live in that world.

I also disagree that the "optimists" don't believe in property rights, as Thierer implies. I'm a huge believer in property rights. My point is simply that "property" needs to be applied properly -- meaning not to infinite goods, where it doesn't make much sense. So while I can see where Adam is going with this chart, I'm not sure the characterizations really fit.

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