Today at ad:tech SF, Mark Kvamme said something I’ve been saying for a while now — the online media party is only now just getting started. The fact that only 5% of ad dollars are spent online, and yet people spend 20-30% of their ‘media hours’ online, means that the current online ad market $12B is likely to hit something like $30B by 2008 (Mark’s prediction), and end up north of $100B in the foreseeable future.
The problem is that too little of this money is going to the publishers and site developers that create the content and services that draw people onto the ‘net in the first place. Far too much is being eaten up by the throngs of middlemen — ad networks, “lead generation” shops, affiliate networks, SEO’s and SEM’s, and the like. Publishers are only getting a 50% of 20% of what they should be getting — all the rest is going to middlemen and arbitrage. I didn’t see that many publishers at ad:tech today — but it sure was a party. How long are online publishers going to continue paying for someone else’s party?
