Saturday, May 28, 2016

never mind the bull elks, here's the ex publishers

Bull Elks face, what economists call, a collective action problem.

Over time the genes for bigger antlers have prevailed because larger antlers make an individual bull more likely to win in a fight with a rival bull.

Bulls that win more fights have greater status in the herd, and access to more lady elk action etc, so there’s significant benefit on an individual level.

However, large antlers force on their bearers some less than optimal compromises.

Getting about in the elks natural habitat - dense wooded areas – is hampered by giant antler-age, and therefore increases the risk killed and eaten by predators such as wolves.

As a group, elks would be much better off if each bull's antlers were much smaller, bulls with smaller antlers would be better able to escape predators.

But as long as there are some bulls with the big antlers the less well endowed will always come off worse in battles, and therefore less likely to pass the genes for those smaller antlers into the next generation.

The individual payoff on larger antlers is thus substantially larger than the collective payoff.

The collective action problem (on behalf of bull elk genes) is that even though it would be better for all bull elk if everyone’s antlers were smaller, it’s not in any individual bull's interest.

Any trait that emerges because it helps individuals compete in battles against members of the same species runs the risk of resulting in a handicap for the species as a whole.

Online advertising.

While publishers at one point may have shared common interests with advertisers - reaching readers -each also had conflicting interests, principally around how each made a buck.

Enter the ad networks with the promise of identifying and tracking prospective customers on behalf of advertisers, thus devolving the publisher from their part of the conundrum.

This created a wedge - ad networks are not interested in the needs of readers, publishers become distanced from the needs of advertisers - and before you know it we’re in the whole mess of fraud and goodness knows what else.

Meanwhile, the advertisers who really only want to efficiently reach punters, start scratching their heads and looking for better online advertising options.

Enter stage left, Facebook, Google, Apple et al and it's out with the adtech layer and integrate all the quality publishers into their platforms where the ad-blockers don’t reach.

Both Google and Facebook have for a long time been media owners - both made good money from advertising - but now they are starting to look like the whole game and a somewhat simpler one for online advertisers to navigate.

Facebook to build the brand, Google to get it in their hands.

For a time, the individual payoff for online publishers on adtech antlers was large, now the collective payoff is more like being stuck in the woods with a wolf.

Never mind the bull elks, here's the ex publishers.