I was reading DHH's tweets about Twitter's new plans for making money (ads) and their crackdown on third-party apps, which prevent them from showing their own ads.
The reason it's so hard to invent new clever monetization strategies is that there really isn't an advertising problem anymore.
Here's why.
What does it take to succeed today?
If you do that successfully, everything about the internet, social media, and the connectedness of people today work to your advantage, and you don't need traditional advertising at all.
Just get your story out there, and it will spread. People will want to hear your story, and they'll help you spread it. That's how you reach people who aren't actively looking for a solution.
And Google has pretty effectively solved the problem of reaching people who are actively looking for a solution to their problem.
So if you're trying to connect with people who aren't actively looking, and you don't have those four things in place, then you're in trouble, and now you need to rely on good old TV-style interrupt marketing, where you inconvenience and bother people who are actually trying to do something else - like reading a story, watching video, chatting with their friends, etc. - with your message, which they're almost guaranteed to find to be a nuisance.
Of course, there's no shortage of people who would rather throw money than ingenuity and creative thinking at the problem of reaching customers, so there'll always be a market for interrupt-driven advertising.
But its effectiveness is dropping fast, and the annoyance your potential customers feel is increasing equally fast.
Smart businesses don't have an advertising problem. Traditional advertising is like a tax on dumb businesses.
Twitter, just be honest: "The only way we can figure out how to make money is same ol' display ads and we need to own the client for that".
All these social apps pushing off making money so they can lure investors with "new monitization" seem to end up with 1995 display ads.
You can tell that Twitter wasn't proud of admitting that they're no different than any other eyeball engine out there by way of announcement
The reason it's so hard to invent new clever monetization strategies is that there really isn't an advertising problem anymore.
Here's why.
What does it take to succeed today?
- Get noticed
- Get people to try your product
- Get them to keep using your product
- Get them to tell about your product to their friends
If you do that successfully, everything about the internet, social media, and the connectedness of people today work to your advantage, and you don't need traditional advertising at all.
Just get your story out there, and it will spread. People will want to hear your story, and they'll help you spread it. That's how you reach people who aren't actively looking for a solution.
And Google has pretty effectively solved the problem of reaching people who are actively looking for a solution to their problem.
So if you're trying to connect with people who aren't actively looking, and you don't have those four things in place, then you're in trouble, and now you need to rely on good old TV-style interrupt marketing, where you inconvenience and bother people who are actually trying to do something else - like reading a story, watching video, chatting with their friends, etc. - with your message, which they're almost guaranteed to find to be a nuisance.
Of course, there's no shortage of people who would rather throw money than ingenuity and creative thinking at the problem of reaching customers, so there'll always be a market for interrupt-driven advertising.
But its effectiveness is dropping fast, and the annoyance your potential customers feel is increasing equally fast.
Smart businesses don't have an advertising problem. Traditional advertising is like a tax on dumb businesses.
About Calvin Correli
I've spent the last 17 years learning, growing, healing, and discovering who I truly am, so that I'm now living every day aligned with my life's purpose.
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