Music, Technology, Art, Economy

Ultimately, the fact that online ads get viewed more when they match surrounding content is a strike against the tendency to build advertising networks. If advertising spots are simply auctioned off, then you can’t design an optimized ad for each placement.

When you advertise through an advertising network, your ads will get fewer fixations than if you contract directly with the publisher for a specific placement and design your creative to fit that spot. As a result, you should bid less for network ads than for customized ads that you place yourself.

There’s a concept in game theory called strategyproofness, which essentially means that the rules of the game give you the incentive to reveal your true preferences (regardless of whether or not other players are doing the same).

This is what being ‘not evil’ is really all about - telling the truth about your strategy. It’s powerful because it forces you to focus on innovation, instead of gaming the system.

The interesting question is why some tech markets are strategyproof - whereas others (think MS) clearly aren’t. I think the answer has something to do with this: as disruption accelerates, truth-telling becomes a dominant strategy because gaming the system leaves you worse off in the long run, by making your decisions over time inconsistent.

You can think of this as a repeated game where outcomes are path-dependent because both rules and decisions have a memory.

According to the Bureau of Labor Statistics, there are about 1.4 million child care workers, and is it an occupation in high demand. The BLS says child care workers must be “mature, patient, understanding, and articulate and have energy and physical stamina.” In exchange, the median national salary is $17,630. (At Gap, the average worker makes about $22,000.)

The advocacy group Center for the Child Care Workforce points out that only a handful of the more than 800 occupations surveyed by the BLS have lower wages—these include parking lot attendants and dishwashers.

Executives charged with rolling out cutting-edge software products or on-line versions of their magazines are tempted to abandon the classic lessons of economics, and rely instead on an ever-changing roster of trends, buzzwords, and analogies that promise to guide strategy in the information age.

Not so fast, say authors Carl Shapiro and Hal Varian. In Information Rules, they warn managers:

“Ignore basic economic principles at your own risk. Technology changes. Economic laws do not.”

Understanding these laws and their relevance to information goods is critical when fashioning today’s successful competitive strategies.

Information Rules introduces and explains the economic concepts needed to navigate the evolving network economy.

Social media is one dangerous, double-edged sword: it attracts and sucks out a lot of attention but it fails to live up to any conventional advertising metric. I wrote about this some more here and here.

Yet to then tell marketers “tough, pound sand and adapt” is foolish. We want online media to remain a free ad-supported environment, so we have to play along with advertisers (not kowtow to them, but listen and understand to them).

Spewing nonsense about how the web changes all of the rules is mumbu-jumbo. Even if there will be many revolutionary shifts in the paradigm (insert many more buzzwords) it won’t mean that overnight things shall change all that much.

The war against terrorism has evolved into a war of ideas and propaganda, a struggle for hearts and minds fought on television and the Internet. On those fronts, al-Qaeda’s voice has grown much more powerful in recent years.

Taking advantage of new technology and mistakes by its adversaries, al-Qaeda’s core leadership has built an increasingly prolific propaganda operation, enabling it to communicate constantly, securely and in numerous languages with loyalists and potential recruits worldwide.

“It is just plain embarrassing that al-Qaeda is better at communicating its message on the Internet than America,” Defense Secretary Robert M. Gates said in a speech in November.

“As one foreign diplomat asked a couple of years ago, ‘How has one man in a cave managed to outcommunicate the world’s greatest communication society?’”