the Onda

I've been thinking a lot about intent lately. Or specifically, ever since Google reported their earnings and claimed that they were not as good as they might be because of the failure to monetize social networking inventory to expectations. Of course, this is a complicated way of saying: people just don't click on ads when they are on MySpace and so we don't make money despite having exclusive access to advertising on them!

I don't think it takes some kind of advertising genius to see why this is the case: on both MySpace and Facebook, the link density is quite high: it's often hard to click on the thing you want, never mind a piece of advertising. Additionally anything that is put on those pages is competing with "needs" that are of much higher priority on Maslow's hierarchy of needs, namely mating and socializing/gossiping (the modern day version of delousing).

But there is another piece around intent which all of us on the web ought to think about, especially if we really are moving to a 95% advertising-sponsored consumer Internet. When I type into a Google search box for some portion of the searches that I run, I am as close as I can be to wanting to buy something without actually being in a store (and I loathe stores). This is why it is much more likely that I'd be willing to click on an ad related to whatever it is that I am searching for. Sitting-forward with the intent to spend dollars is something that I don't see as a regular part of my Internet use anywhere else with two exceptions: eBay, and Amazon. And unsurprisingly, Amazon seems poised to capitalize on this behavior outside of the four walls of their own store with the recent launch of Product Ads.

Another related example: when we started Tabblo, our plan was to affect cost that it takes to acquire a user who wanted physical products from their photos by giving them a compelling creative and social experience around the sharing of their photos to "get them in the door" and thinking about making creative goods. This was in direct contrast to the big 3 photo-sharing sites (Shutterfly, Snapfish, and Ofoto) that spent all of their money driving people through a photo print experience. This past week Shutterfly released its 2007 results and as we crunched the numbers on the data available, we were surprised by how much higher their conversion rates are to printed products (not just prints) relative to the number of page views they see. Note that we never expected that we'd match them page for page— after all, they exist solely for the purposes of getting their users output— but the wide gap in conversion rates showed yet another example of intent rearing its ugly head.

Maybe I am being incredibly stumb on this one (the place where stupid and dumb collide), but I just don't see how over the long term inventing a new form of advertising— as Facebook claims it will to justify its $15B valuation— will get us past this intent hurdle. Even display ads, the bread-and-butter of all of the new media content sites, seem threatened by CPC ads which naturally implies that those sites too will have to worry about the following dynamic: when it comes to serving advertisers on the Internet, it would seem the name of the game is web-as-yellow-pages. As far as the media model goes, everything else might just be filler, or at best, content for the gatekeepers of intent (Google ins some instances).

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