Making Money from Content

People don’t mind advertising. In fact they like it when it’s relevant.

What people don’t like is being served an advertisement for something that’s totally un-relevant to them. And until the advertising ecosystem becomes more intelligent and transparent this conundrum isn’t going anywhere.

I’ve been witness to a good example of this myself over the past week, having been served the same ad for stationary swimming pools over 25 times. I live in a condo, have a gym membership, and head to a cottage on the great lakes every summer weekend. There is a 0% chance I’ll be purchasing one of these pools anytime soon, yet the pitches keep rolling in.

The problem is being worked on… Within the mobile space, massive ad network Jumptap is developing tools that allow for customers to reach out and customize what types of ads they want like to see. It’s not a bulletproof cohesive list, but it’s a start. Are you interested in fitness? Sure. What about Chat and Email? Not really. Just toggle the categories on or off and the ads are then tailored to your saved preferences.

What do you think – if you get to choose the ads, would it make for a more engaging experience?

Every single action we take online can be monitored, analyzed, and then used to serve us even more targeted information. Online advertisers have been doing this for years by dropping cookies and tracking our web behavior. But many of us don’t realize that every iota of our actions are being tracked. It isn’t just the websites we click on, but whether we scroll a screen, how long we spend on a page, what links we click on, where we track or hover a mouse, and so much more. Amazon and Netflix have been using filtering technologies for quite some time.

The same organizations that have been helping retail sites target information are doing the same for content sites. Services such as Baynote and Loomia track and digest more than a dozen user behaviors on retail and content sites to serve up more personalized and relevant information.

Known as “session psychology,” many companies are working very hard to make information more and more relevant in hopes to lead to the goal of Web 3.0, a.k.a. the semantic web.

But our focus has constantly been specifically on user behavior. There are so many other factors, not measured by personal behavior, that affect our decision and interest.

On Friday, the LA Times reported that NBC.com has announced that they’ve enlisting the services of a British company called Filter to serve up more targeted personalized video content. Those recommendations will be based initially on the digital breadcrumbs we leave behind as we search, click, and browse across the web. NBC.com Communicator, built on the itiBiti communications engine, is a separate effort.

What’s intriguing about the Filter announcement is how they’re taking into account other factors that have nothing to do with individual behavior. Time of day, day of the week, and location are some of the other factors that come into play in the decision making process. For example, people are more interested in news information in the morning, but want to watch comedy at the end of the day. Comedy viewing also shoots up dramatically at the end of the work week, said Will Rogers, CEO of Rooftop Comedy.

Filter is keeping much of their secret sauce hidden, but they are also taking into account what videos your friends on Facebook are watching as well. This is not a new concept either. Social reading for recommendations is a feature that Loomia uses as well.

Years ago when Napster went legit in its pay a flat fee for all-you-can-eat music, many believed that they hit upon something huge. People have already proven that they don’t like their consumption metered. Phone service and Internet service went in that direction. Later, DVDs-by-mail providers Netflix and Blockbuster did as well. Flat-fee monthly pricing seemed an obviously successful business model for music. But it still hasn’t worked nearly as successfully as iTunes’ $.99 per song own-it-forever model. Why?

People don’t want to pay an ongoing fee for the music they love

You can give people all the music they want for a comically low price (MOG offers a $5/month subscription and Rhapsody just lowered its price to a $10/month subscription) but it’s still not enough. Because once people have the music they love, they don’t want to part with it. And on the onset, these services are saying, to keep the music you love you have to pay us a fee every month to keep it. It’s a concept that rubs a lot of people the wrong way. Still both services allow you to download and purchase the music. But many people think that’s paying double for their music.

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