Power of the People. Power for the People.

Two posts caught my eye last night. In one titled Power to the People, Albert Engler of Union Square Ventures makes the very credible argument that one of the great constants of the web is:

....taking power away from existing large institutions and pushing it out to smaller entities and often all the way to individuals. In the process it is building up new institutions (such as Google), but the net result appears to be a distinct shift of “power to the people.” We see this at work in many of our existing investments: Etsy’s marketplace for handmade goods lets artists connect directly with buyers; Covestor enables investors to share their track records and discover each other;  Wesabe puts folks in control of their finances; Tumblr facilitates sharing oneself; BugLabs lets anyone create a custom network-connected device. In each case, individuals are empowered in ways that simply were not possible prior to the web.

In the other post titled Why Isn't Facebook Making More Money?, Scott Karp of Publishing 2.0 makes a relatively simple, but important distinction between Google's ad machine versus Facebook's recent ad programs.  As he says, 

What’s the key difference between Google’s value proposition and Facebook’s? With Google, the value to users and the value to advertisers is perfectly aligned. Everybody wins.

With Facebook, if you read between the lines, it’s really the same value proposition as traditional advertising — advertisers forcing themselves on users, in a way that creates little or no value for the users....

......On Facebook, the ads, despite all the innovation, still aren’t something users are really asking for.

From personal experience, after closely looking at Google's advertising solution(i..e adsense) for long tail of publishers (i.e.,  "people") and trying to replicate it as Yahoo!, it became pretty apparent to me that traditional ad models do not play well with this segment. Even if the "user" or long tail publisher is asking for it, the current models do not allow them to create enough value to be rewarded with meaningful benefit.

Finally, Scott asks: "Is it possible on the web to have a more perfect alignment between advertiser and user value than search advertising?"

That is a good question (and it is hard to believe "yes" in the short term). Yet we can make it more actionable by changing the question to be: "How can we better align advertising on Facebook and other social media experiences to provide more value to the users?"  Perhaps one step further would be to ask (in a very biased manner):  can the we take this movement of "Power to the People" in the context of advertising to to provide users something of value?

The challenge of course, is that you don't get something for nothing.  We must find a way to aggregate enough value from "users" to ensure that the advertiser can provide something meaningful in exchange. The answer to solving this advertising conundrum lies in three core shifts in advertiser / user relationships.

 - Moving from event (i.e., click, impression)  to engagement (think CRM);

 - Moving from content to context;

 - Moving from singular benefit to social benefit.

More to come on this topic.