Two Guys in a Pickup Truck: The Future of Web Advertising?

If you take a dump in the woods, Google knows where you dug the hole. And if you ordered from campusfood.com, they even know what you ate beforehand.

From click streams to purchase history, Google's got a file on you that'd make even the current administration blush.

But what if Google got it wrong? What if the real money is somewhere else entirely?

I've got these friends that are working on this thing. The idea is simple. They put coupons on the web.

The small business owners they work with have never heard of clickthrough. Maybe they've used Google, but they'd never buy a text ad. Sounds like a pitfall. But that's the brilliance of it.

The indian guy selling frozen chicken masala doesn't need to know his CPM or CPA. Either someone hands him a coupon or they don't. It's binary. He doesn't even need to know how to turn on the computer.

And the businesses LOVE this.

They know the power of the web. They know the web can make them money. They just don't quite know how. In the past that was a problem. But not anymore. The thing is this:

As the value created by the Internet increases, the relative cost of paying someone else to harness that value decreases.

We've got all these tools out there that have this huge potential. Unfortunately, sometimes the people who stand to benefit most don't know how to use them.

The entrepreneurs know this. They're able to take these coupons and embed them all around the web. Everywhere from Facebook to the local paper.

The businesses don't know what the hell is going on. All they see is the extra customers.

People buy stuff. They make money. They're happy.

It's a little bit brilliant.

Comments

[John]

I don't get the point of this article.

This isn't new. Having coupons on the internet that can be printed out was one of the first commercial uses of the web. You seem to be talking as someone who was born using the web and just discovered the offline world. Obviously, it's the other way around: the offline world existed first, and coupons have always been printed out.

So is your point that the web hasn't been as successful with local business as has been anticipated? or as pervasive as the noobs born yesterday would assume?

[Alex Krupp]

What I was trying to get at was that as tools on the web get more powerful, they can make money for businesses. But a huge number of small business owners don't know how to use these tools. In the past, they couldn't take advantage of them because the cost of paying someone else to use these tools for them was greater than the amount of money they'd make by using these tools. But we're getting to the point where the cost of hiring someone else to use these tools for you is less than the amount you'd make by using the tools; thus it is now becoming profitable to hire someone else to use these web 2.0 tools for you. This opens up an entirely (seemingly) new way of profiting off the web.

Apparently this is either completely obvious or just really poorly expressed. :-)

[Matt*]

Best post ever. ; )

[Jeff Molander]

Alex...
Fairly brilliant.

"Unfortunately, sometimes the people who stand to benefit most don't know how to use them."

Precisely and this has given rise to the "bullshit" industries (hat tip to Jason Calacanis) known as Search Engine Optimization and affiliate marketing (responsible for everything from spam to adware/spyware). What we have here are groups of middle-men who have stepped in to leverage innovative yet highly open ("game-able") tools like Google. The result is social engineering gone made and what I call a complete Ignorance Economy.

I'm actually writing a book on this.

"They're able to take these coupons and embed them all around the web. Everywhere from Facebook to the local paper."

Precisely -- and please don't ignore the irony involved here. The cost for the seller is not actually decreasing. Due to this middle layer it's increasing and count on that middle layer to keep its techniques shrouded in secrecy... which it has.

[jeremy liew]

Paid search works for ecommerce and lead gen companies because marketers can track their marketing budgets all the way through to the transaction. This typically hasn't been true for transactions that get consummated offline. The two solutions so far are couponing and click-to-call and both are promising (and Google is experimenting with both). It's partly true that local merchants don't know/want to know about online advertising, but other factors include lack of trackability and a need to budget for a flat marketing spend each month. These are all solvable over time.

The business problem that hasn't been solved yet for local online content is the cost of sales. See my blog post at http://lsvp.wordpress.com/2007/03/01/comments-on-insider-pages-sale-to-citysearch/ if you're interested