Don Marti

Thu 26 Jul 2012 07:38:11 AM PDT

The online advertising problem: bullet points

Here's a quick outline of the online advertising problem.

• Advertising gains signaling value when it's attached to something that the user sees as difficult or expensive to produce.

• Advertising gains signaling value as its apparent cost increases.

• Advertising loses signaling value as it's attached to less valuable resources.

• Advertising loses signaling value as it becomes more targetable, since the user can't tell how much of the resource was funded by the ad impression that he or she saw.

• Advertisers tend to pay less for ad media with lower signaling value.

• Internet advertising has a problem: it's targeted increasingly finely, and is therefore less valuable to advertisers.

• Solution: Design infrastructure and applications to make tracking more difficult.