Now this is more like it, WSJ: The Coming Ad Revolution. Esther Dyson crisply summarizes where the value lies for individuals in trading info for relevance:
The new model creates a more trusted environment for reaching high-value, frequent purchasers, whether of airline tickets, electronics, clothes or other items. Where does that leave the less-frequent purchasers? Probably looking to their friends rather than to advertising for advice. I'm an expert on travel; my friends may look to me for hotel choices. When I'm in the mood to buy a book or a new computer, I'll check out what my friends on Facebook are doing.
This does not mean that traditional online advertising will go away, just that it will become less effective. Value is being created in users' own walled gardens, which they will cultivate for themselves in real estate owned by the social networks. The new value creators are companies -- like Facebook and Dopplr -- that know how to build and support online communities.
An interesting tangent to this is another recent WSJ article on measuring the effectiveness of TV ads:
As the Web's ability to target specific consumers races ahead, TV advertisers, who collectively spend about $70 billion a year in the U.S. alone, are under increasing pressure to demonstrate that their money is well-spent. Couch to Supermarket: Connecting Dots
The tables are turned: web advertising is the de facto standard in accountability. Keep a sharp eye out for a similar piece in 2-5 years touting the highly measurable engagement between consumers and brands on social networks as the standard to which online banner ads... and maybe even search... should be held.
