Sometimes I hate being right all the time.

Nearly 13 years ago, I described an inevitable shift in advertising model pricing on the web (see earlier post on advertising equilibrium). In this scenario, ad prices would be determined as a function of risk & timing to the two parties involved. Performance based ads would be the most expensive (from an advertisers perspective) because of low risk and slow payment terms, while impression based deals (and fixed sponsorships) would be the cheapest for the opposite reason. I also wrote and talked about how a shrewd advertiser could exploit disequilibrium because it was commonplace for the actual price curve to be inverted, with performance-based deals being super cheap and CPM grossly overpriced.

Google's shift from CPM ads to CPC in 2003 was the first big indicator that equilibrium was on its way. Facebook's policy shift this week is another major step. In his blog article, Chris Trayhorn writes about the recent recommendation from Facebook to its advertisers that "if you want Facebook traffic, you’d better be buying CPC".

There will always be pockets of disequilibrium, and of course situations where a buyer or seller of ads will add more weight to things like payment timing than the market might ascribe for reasons of their own. However, the general availability of buyer surplus that has enabled really good web marketers to look like heroes to their employers will soon be drawing to a close. Bummer.

The bright side is that with each new medium that comes on scene and survives the evolutionary cycle (more on this another day), the possibility that a new disequilibrium may emerge to be exploited. Interestingly enough, I think the next exploitable curve is likely to come in the "traditional" media channels of print, broadcast, and out of home. We've still got some work to do to assess the true value of these media to marketers (e.g., "what is awareness worth?"), but it is coming fast. So take heart, smart marketers - and you online gurus? Well, your next frontier may be to go back to the old frontier, break out your jackhammers, and peel up some pavement for the untapped gold mines long ago overlooked but still out there.