The Catalyst Code

John Gapper responded today to Esther Dyson’s WSJ op-ed on the coming revolution in advertising.

I’m with John in being doubtful that friending is the future of online advertising. Someone will no doubt come up with a creative way to do some form of advertising for the millions of eyeballs on the social networking sites, but as I mention in my recent blog post, what that will be is still unclear as is how much revenue this will generate for those sites.

The skepticism on behavioral targeting, though, seems puzzling. There are two major obstacles for sure. One is that behavioral targeting depends on collecting personal data and people are getting skittish over that. Some of the more outlandish practices of secretly taking and hoarding data from people will get reined in, but the ad platforms will entice people to opt in to providing data. The other is that behavioral targeting is a technologically difficult feat—think of all those computers churning to select just the right ad for you in the blink of an eye when you sign on the site. Solving that is just a matter of time. But assuming those hurdles are past, behavioral targeting is too great a thing for both consumers and advertisers not to succeed and displace traditional ads. Let’s see, instead of listening to television ads for products I have no interest in, I will only get ads for things I do care about it. Sounds like a benefit to me. And instead of advertisers wasting money on presenting ads to people who will never ever buy their product, they actually get to advertise to people who might. Sounds like they do pretty well too. Traditional advertising is bloated with inefficiencies. Behavioral targeting, while challenging, will be a boon to consumers and advertisers.