There has been a lot of commotion on the web today over TechMeme’s new advertising. Michael Arrington’s headline goes so far as to say, “TechMeme Invents New Kind of Advertising”

How is TechMeme’s new ad model so revolutionary? I don’t see it.  It’s a section of real-estate on a page reserved for ads. Granted, ads in the past often feel stale quickly because the content is not updated often enough, and the RSS delivery vehicle for the TechMeme ads will help fix this problem… but that’s not a new ad model. That’s just a new means by which TechMeme is getting content from advertisers. It’s still a chunk of text content on a page with a call-to-action (the link). When those fundamentals change, then I think “a new kind of advertising” will be invented.

Google AdSense was a new kind of advertising when it was released because no one else (except Overture) was doing simple, plain text ads at the time. Same with popups and banner ads at their respective times of invention because they were such a radical change to the way a user interacted and engaged advertising. Oddcast’s Monk-e-mail deserves the heading “A New Kind Of Advertising” long before TechMeme does.  TechMeme’s RSS ads afford no new user interaction… It’s just fresher content in the same old interaction.

I’m also not a big fan of the fact that TechMeme’s “new model” is based on CPM-like structure (It’s essentially a CPM of $5-$8, but it’s actually based on a fixed cost for a month-long run… it’s TechMeme’s traffic was fixed over time, then it would be identical to CPM). By contrast, CPC is great because it measures just how useful an ad is to the end user.  I don’t care how many time a user sees an ad; if the user is not clicking on the ad then the user can’t be all that engaged.  CPC requires that the ad be engaging and useful to customers.  If it’s not valuable to end-users, then the ad doesn’t run because the publisher has no incentive to run it. No clicks = no incentive. Usefulness to the end-user is built into the business model.

TechMeme could have chosen to build their RSS ad delivery system on top of a CPC model, but they didn’t, and I’m not certain why.  My best guess is that in the CPM model, TechMeme is guaranteed a payday.  They are not dependent on the quality of the content that the sponsors write.  Plus, it’s consistent revenue that they can count out.  But, I have to reiterate that their desire for guaranteed money and consistent revenue comes at a price to consumers whose interest in the ad is not required for TechMeme’s payday.

I don’t mean to champion Google AdSense over all other options.  Note that on my own blog I don’t run AdSense, but I do run FeedBurner’s Ad Network (which is CPM, not CPC).  I think AdSense delivery and UI comes off flat, and I have been trained by past experience that the content behind an AdSense click is generally useless.  The main point I’m trying to make is that TechMeme’s new advertising isn’t worth all the praise it’s getting, and I used some of the aspects that Google AdSense does well as a counter-example to TechMeme’s missteps.