In the early 1990s before the Internet took hold with the launch of the Mosaic browser, cable television executives predicted there would be 500 channels of television in the future.
What none of those cable executives predicted at the time was the transformative impact of the Internet. Five hundred cable channels now seem laughable. How about 500 million cable channels? Still, the effectiveness of traditional advertising technology will continue to drop due to ad avoidance technologies (DVRs, etc.). If advertisers and brands can’t reach consumers via these traditional channels, they want to reach them online.
With free and easy publishing tools, high schooler can now create a high-traffic site within months. And with low-cost video capture and publication tools, enterprising publishing entrepreneurs can create their own video content channels. If those entrepreneurs focus on a specific niche, they can find an audience and income and profits quicker than most media execs ever imagined.
The holy grail for advertising technology is to deliver personal, relevant, and laser-targeted advertising. Again, we're in the very early stages of this type of targeting. All you have to do is look at the retargeting ad "failures" in your own Web searches to see how these initial efforts are very crude. For example, if you research and buy a specific child's car seat online, and then for weeks and months afterwards, you're targeted on multiple sites with car seat ads. That's a crude attempt at personalized targeting -- but it's a failure. Why? A car seat purchase is something you'll do one time and may never repeat. Yet, the advertising algorithms are retargeting you with car seat ads as if your research indicated you'd be making regular car seat purchases.
Targeted advertising in the digital video space is still very new, and we admit, initially it can startle some people. In a personalized video, a person can hear and see his name in a video ad tailored to that person with specific details - for example, a coupon for a nearby retail location or directions to their closet retail location, etc.
We think that people's initial skepticism will eventually wane just as Gmail users have become comfortable and used to seeing automated ads targeted based on a person's email discussion.
There are online privacy advocates who vehemently fight any type of targeting, especially micro-targeting or personalized targeting. We happen to disagree with those folks. Advertising-supported content is the model that has developed to support most commercial publishers, who aren't nonprofits, and can't produce high-quality content for free. We think privacy can be assured with technologies that allow consumers to receive highly relevant, targeted ads based on their specific interests.