Advertising is the Medium or Distributed Broadcasting
June 30, 2008
Google just announced a deal with Family Guy [and American Dad, but that's basically the same thing] creator, Seth Mcfarlane, that will see Google be the exclusive distributor of his new animated creation.
Google will distribute the short animated clips via the Adsense network, to sites with a relevant audience - it's calling the new service the Google Content Network.
“We feel that we have recreated the mass media,” said Kim Malone Scott, director of sales and operations for AdSense.
Not a small claim - but GCN is certain to cause concern at the A and NBCs of the world.
This mechanism turns advertising into the medium. It reaches a huge, measurable audience, by distributing the content via hundreds or thousands of sites that host Google Ads.
It turns the broadcast advertising model upside and inside out. The content doesn't create the audience to sell it to advertisers - it goes out and finds its audience, via the advertising, using other people's content, that already has an audience.
Or something.
A while back I posited that Google would creep into owning other media to extract maximum value from its ad platform. [It has already released Google TV and Print and Radio Ad networks.]
But perhaps I was thinking about this all backwards. It creates the ad network by aggregating eyeballs from sites all over the web, and that becomes the distributed broadcast medium.
Why own the media, when you can broker all the advertising and content using other media?
Which suggests a different model, a model that America loves - a market.
Enron, the fallen poster child of 90s corporate American, was ultimately a market - an energy market. It didn't make anything - it was the transaction medium.
In fact, it was market crazy. It loved to create trading platforms. It announced a market to trade broadband.
Then it created a market to trade the weather.
[This is true. You could trade finanical instruments - derivatives in fact. Futures. So speculative contracts based the fluctuations of other variables - in this case - THE WEATHER.]
I realise that comparing Google to Enron sounds absurd, at first glance. But it's not. Honest.
[Enron was named Most Innovative Company in America by Fortune Magazine 6 years in a row - Apple holds the title at the moment, but Google is up there, and it won Most Innovative in Fast Company.]
The principle of being the market rather than a supplier or buyer is a sound one. When Enron launched EnronOnline, a web based trading market for commodities like power and gas, it was rapidly adopted by every major energy company in the deregulated US energy market.
That's why everyone loved them so much - suddenly if you wanted to do any business at all in the energy category, you had to do it with Enron.
[Enron used a bizarre and ridiculous accounting system and were very naughty - you can read all about it here.]
[The problem arose because of the way the market was structured - Enron was financially involved in every transaction - in essence you were always buying or selling off Enron - which meant costs were rising over time, as they took on more and more risks, but their revenues looked awesome, when accounted using aforementioned absurd mark to mark accounting, which enabled you to mark future revenues as though you already had them. Anyway, this is getting way off the point. Perhaps this whole Enron analogy was misguided.]
The [rapidly vanishing] point, is that the market is the house [to use a casino analogy] and the house always wins.
[Although this analogy is also flawed - unless you are talking about poker at the casino, where you pay a proportion to play, but the house isn't actually gambling itself. Oh I give up.]
Why own some media, when you can broker the ads to all the media?