From Daniel Lyons, aka Fake Steve (who linked to us a few times back in the day when he blogged as Faux Jobs), some interesting stats about blogging vis-a-vis the broader online advertising space:
Last year the total spent on blog advertising in the United States was a mere $411 million, according to researcher eMarketer. That represents only a sliver of the $23.7 billion spent on U.S. Internet ads last year, which is itself only a fraction of the $276.8 billion spent on all forms of advertising in the U.S. By 2012 blog ad spending will reach $746 million, while overall online ad spending will hit $32 billion, eMarketer says. More money was spent on e-mail advertising last year than was spent on blog advertising—yet you don’t see anyone touting e-mail as the next big billion-dollar media business. Technorati, a blog researcher, estimates that bloggers who run ads earn an average of $5,060 per year.
I tend to agree: blogging is a means to an end, it is not - and should not be - the end itself.
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WatchMojo NewsletterThis is very accurate from my experiences and how traditional media companies look at what we do, and how it’s changing quickly. From SAI:
Clay Christensen said time and time again disruptive business confuse adjacent innovation for disruptive innovation. They think they are still disrupting when they are just innovating on the same theme that they began with. As a consequence they miss the grass roots challenger — the real disruptor to their business.
The company who is disrupting their business doesn’t look relevant to the billion dollar franchise, its often scrappy and unpolished, it looks like a sideline business, and often its business model is TBD. With the AOL story now unraveled — I now see search as fragmenting and Twitter search doing to Google what broadband did to AOL.
We see this all the time: publishing and distributing videos on the Web is small potatoes to billion dollar media companies, but the longer they go without doing it, the more they will suffer. But the sooner they embrace digital distribution, the sooner they will kill themselves by destroying their traditional revenue streams. This phenomenon isn’t a mere case of the Innovator’s Dilemma, it is a double jeopardy that is akin to the doomed if you, doomed if you don’t mantra.
I hate to burst everyone’s bubble here, but the entire Twitter vs. Facebook argument is reflective of how VC backed projects - and potentially VCs themselves - are doomed. Twitter, Facebook, Friendfeed, etc. will actually enlarge the market they operate it, but that is secondary because the “status” argument is sort of moot. It’s a freaking feature people, not a company Sure, Facebook is a company, but Twitter is a feature. And yes, sure, a company has sort of spawned around this one feature, but this has happened for no reason other than VCs had too much money to know what to do with it, and because they were crazy (in a good way) enough to invest in it. Great. But that reality is over. Money ain’t cheap, not anymore.
But the bigger point is, Twitter is so representative of the idiosyncratic nature of most VC investments that it just goes to show that most of the VC-backed ventures are doomed to fail, because you need an entire community to dream up a potential business model… and even then, the business model tends to underwhelm the expectations baked in a $250M startup. Having a small group of early adopters and otherwise vain folks argue about the merits of “status” peddlers is ridiculous. It is. And the fact that no one has the common sense or enough modesty to point this all out is a bit shameful.
Lastly, the biggest proof why the VCs funding all of this hype were a bit out of their element is the fact that one of the so-called items on the investment checklist is supposedly “defensibility”, and seeing how Facebook just opened their API and will be able to harpoon Twitter’s fortress just goes to show that the entire landscape of VC-backed firms were all a big house built on sand… sort of like the kind of thing that took down the broader financial industry.
But this is the “status” of things: instead of debating how to get our economy back on track and how to keep people in their homes, we’re debating what “platform” is the raddest way to tell people how freaking vain we are. Groovy!
Or maybe, just maybe, I am just crazy, but as I like to say, one man’s crazy is another man’s common sense.
