The press, the VC money, all of it has seemingly followed the rise of social media sites. Interestingly enough, though, the largest of the Internet advertising shows seems to have the least representation from the companies that have captured the buzz. In many ways, it seems counterintuitive that these companies would not make themselves known at Ad:Tech four weeks ago, especially considering that these same sites that seem to encapsulate the zeitgeist of this Bubble 2.0 owe their existence to the rise in the Internet advertising economy. You would think that the companies who need the advertising the most for their businesses to survive would use some of their funding to make a splash at the Super Bowl of Internet advertising conferences. Instead, these Web 2.0 companies choose to present at shows where only their peers, the other technology driven, at some point in time advertising supported sites, do. If I ran a site whose business model got funded because it would make money via advertising when the time came, I’d make sure to make myself known where the advertisers gather. Instead of the next best things before, during, and/or after Facebook battling it out at Ad:Tech New York, we had a different type of showdown, or at least showcase, CPA Networks.
Somewhere around five years ago, the landscape of Ad:Tech looked quite different. As we’ve certainly remarked on many times before, during the early 2000’s, search management companies and the Tier 2,3, and 4 search engines seemed to own much of the of the tradeshow floor. These were entities that focused on helping advertisers get their message into the next frontier of online advertising, search. At that time, Google existed as a consumer destination site but didn’t have an advertising program. Hard to believe but most of the companies either focused on paid inclusion instead of paid search; those that did focus on paid search had straightforward applications that catered to getting advertisers a certain position. They ranked among only a handful that made the paid search landscape their core business, and it made sense because the paid search landscape encompassed many consumer facing brands but only Overture when it came to real distribution. That certainly started to change as Google showed that another company could enter the arena and build an advertiser base, which included in the presentation ranks a din of companies to help manage rank across them.
This is old news now, but Google single-handedly altered the landscape of Internet advertising, from cleaning up the glut of companies focusing on position to paving the way for Bubble 1.0 models, i.e. focusing on users not money. With Google’s AdSense, along with equal change in the hard costs to run a site, it seemed that anyone could make enough money if they had enough users. Just because a site has some users doesn’t mean that it has a clear value to advertisers. Walking around Ad:Tech this year, it seemed that the number of performance based companies popped up in response to the ambiguity from the user-only sites. Not only that, but it seems that the performance-focused companies serve another purpose as well, to provide an alternative to the ever competitive and confusing landscape of search. In some ways, it feels like today’s CPA networks are 2002’s search placement – both paid inclusion and sponsored listing – alternatives. What it means is that they are focused on the right thing but that when we walk the show floor three years from now, only a handful will still exist in the form they are today.