ChasNote

03 May 2005

Tapping the "Endemic Relationship"

When I read last week’s news that AdSense will allow marketers to buy specific sites and deliver graphical ad units rather than just anonymous text-based CPC programs across Google’s wide web of affiliates (News.com), I said: Uh oh, here comes Google. Paid search is moving beyond its roots in direct-response marketing to create massive advertising networks—a scary prospect for AOL’s Advertising.com and Claria, for sure, but should Yahoo and CNET Networks worry too?

Why not—a little paranoia keeps the innovative juices flowing. But upon further consideration, Google’s latest move signals a recognition that context matters, in fact, more now than ever before. John Battelle (Wired, Industry Standard and now FM Publishing) saw this trend coming at least a year ago. In his 5/25/04 post he discussed the “endemic relationship” among three mutually-dependent constituencies: content publishers, advertisers and the audience they both need to connect with.

His point of view isn’t completely new: industry publishers since Gutenberg have built businesses around “endemic advertisers.” But in talking about the “endemic relationship” among community members (including the advertisers), Battelle is talking about something richer and at the same time less limiting. The magic of niche publications, online or off, is that readers “enjoyed the ads nearly as much as the editorial, because the ads served them, seemed to understand who they were in relation to the community the publication created” (my boldface). What we at CNET Networks refer to as the “authentic brand experience.” Behavioral targeting, paid search and sprawling ad networks all sever the meaningful relationship between marketers and the prospective customers they want to reach: “Advertisers in these networks are not intentionally supporting the publication, and by extension they are not supporting the community the publication has created. In essence, they are not being good citizens of the community where their advertising is being displayed.” This logic also explains why non-category advertisers on tech sites, say General Electric underwriting (NPR-style) an Esther Dyson video series on innovations and business, can succeed within new contexts: By understanding and participating in the endemic relationship—the special sauce that keeps the audience coming back—advertisers can leverage the rabid publisher-audience affinity of niche environments.

The challenge marketers face has only grown tougher. The proverbial thirty-two flavors of Crest—“segmentation vertigo,” according to Kerrie Jacobs at MetropolisMag—means exploding consumer choice. Ad saturation combined with media fragmentation (500 channels, 9+ million blogs and 40,000 news ones each day) means that it’s harder than ever for a marketer to make an impression—let alone build a relationship with a consumer. This dilemma pushed many marketers toward the safety of paid search and direct response metrics. But this solution came at the expense of building partnerships with publishers—tapping into the endemic relationship—that might have given them a shot at some audience bonding.

Google, of all people, knows the CPC love-fest won’t last forever. Marketers need more out of their media partners than clicks. My prediction is that CPC/PPC—the currency built around diverting customers from “edit” environments to marketing environments—will give way to a model where marketers join forces with publishers to create content environments that include edit and marketing content in peaceful cohabitation. Marketers will spend less time creating executions that convince consumers to click on links, and more time porting aspects of their brand experience to high-engagement contexts. TrendMicro’s CEO, Eva Chen, for example, recently posted her blog to ZDNet (Eva's blog), inserting herself right into the fracas that gives ZDNet credibility with its audience.

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