It is early in the first quarter of a long game, but Internet advertising is way behind technology. I was talking about this fact with our CEO Brian Wiegand yesterday and he came up with the title of this post. My goal is to show you how this is true.

Let’s first consider our relationship with advertising. To most people advertising is a dirty word. Look at the traditional world. We have been bombarded and interrupted by unwanted advertisements from the time we could walk and most of us have developed a healthy animosity towards ads. In fact, we hate them so much we actually spend money to avoid the damn things by buying things like Tivo DVR’s and Satellite Radio. Yet, advertisements fly around our heads every day like pesky insects on everything from city buses to products placed in our favorite movies. Occasionally, we find one entertaining or relevant, but mostly we simply endure them as a necessary evil.

But technology has given us the tools to dramatically change this relationship. Think about it. The potential of online advertising is astounding. For the first time in the history of the world, it is now possible to accurately measure and track how consumers are actually interacting with each individual advertising unit on a global scale and in almost real time. Advertising now has the potential to become 100% accountable; a scientific certainty instead of a crap shoot; a laser beam instead of a shotgun. Technology has given us the potential to turn advertising on its head.

Yet, for all its potential, most people still view advertising as a dirty word. We avoid banners, and hate things like pop-ups and interstitials that continue to interrupt us. We have to sit through a full page ad on our screen before we can enjoy our New York Times or CBS Sportsline and we try to avoid these ads as much as we can (Steve Gilmor even correctly pointed out that RSS is like a Tivo DVR for the Internet). Businesses sell us “free” versions of their products with ads included and paid versions that are ad-free. We fret openly when the pesky insects start to invade previously pure environments like video games or organic search results.

This problem is true even of paid search advertising, the current superstar of online advertising. Google may have scored a touchdown with this model through its AdWords/AdSense program, but this touchdown isn’t going to win the game (I’m sure Google would agree with me on this). On occasion, people view Google sponsored links as helpful, kind of like the yellow pages are helpful. But don’t you still try to avoid these ads? Aren’t you happy that they are pushed off to the margins of the screen and conspicuously labeled “Sponsored” to help you tune them out? This is even more true of Adsense syndication. Think about all of the Web 2.0 companies that are using Adsense as their revenue model. Aren’t these ads simply a necessary evil and a minor distraction that interrupt you from what you are really doing on the site?

At the end of the day, most people still view sponsored links with mistrust; the necessary taint of capitalism that is included to support a better world of pure organic, trusted content (if you had the choice to use a site with or without ads, which would you choose?). Even in their purest form, paid keywords on the engines (Google/Yahoo/MSN) still suffer from an inherent misalignment of incentives and potential for mistrust. The GYM ad bidding systems fuel the inverse relationship between the amount a company paid for a sponsored link and the end value to the customer because the cost of that advertising is built into the end product price. And how does GYM organize these ads? By their revenue potential, which doesn’t directly equate to customer relevance. To add insult, this whole auction system is hidden from users (isn’t this why we mistrust ads?).

In short, even with Google’s touchdown, technology is still kicking advertising’s butt.

Our mission at Jellyfish is to turn the tables by using technology to dramatically change the relationship people have with advertising. To use the “database of intentions” that John Battelle writes about to make advertising something that people actually seek out, something that they control and love to receive. We think this new form of transparent advertising will transform how you view advertising and how the Internet connects buyers and sellers. We hope it will create the holy grail of advertising that marketing guru Seth Godin defines as “perfectly matching sellers to highly receptive buyers.”

How does our advertising work? By creating a transparent market in which advertising and consumer value ALWAYS flow in the same direction. The precision of the Internet makes this possible. We can use technology to empower individuals to take control of advertising in a new and radically different way. We aren’t the only ones working on this problem (see Root.net and Attentiontrust.org, for example), but we think our form of transparent advertising will be the tipping point that takes this idea to the mainstream consumer.

I hope you agree that this is a big idea and that you stay tuned.

This entry was posted on Wednesday, May 17th, 2006 at 12:26 pm and is filed under Transparent Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.