Google – New Reality Model

Begin a new chapter in the era of economic prosperity, in which Google has taught us how to manage the abundance, defiance of the fundamental principle of economics as formulated for the first time in 1767: the law of supply and demand.

Many industries, its value is built on scarcity. Airlines, Broadway theaters or universities have a number of places that they could not count itself as they wanted. Places were few, so their value increased. Newspapers, and not you, had the only printing machines in town, so you can ask from you a fortune for providing access to their readers. Place on the shelves in grocery stores also have been limited, and the manufacturers pay for the privilege of selling. TV networks have only a limited number of minutes during the day, when the audience was the largest, to the extent that the advertiser to outdo one to buy advertising time. Shortage was to power: those who controlled the scarce resources, they could set their prices.

Already, however, is not so. Do you want to sell your product on the market breeds? You need not have to fight for shelf space in stores in 1000. Now you can sell, who only want the entire world, online. When shopping at the same mall as everyone else, want to find a dress that no one except you will not have? Today, an infinite choice of waiting for you on the Internet. Just one click, plus delivery by UPS. And after all. You do not want to buy a newspaper, „The New York Times at the newsstand or pay for access to WSJ.com and reading the news industry there? Today you can find an infinite number of sources with the same information. Even if the Wall Street Journal gives the sensational news of their paid site, when this knowledge is passage – in the form of quotes, links, posts on blogs, grouped, mixed and circulated to the virtual world of e-mail – no longer have exclusive and unique. Today this is no longer possible to maintain a level of long shortage of information.

Advertising agencies and operate as if it was still insufficient space for advertising, although you will find online today, almost endless possibilities to advertise. Managers always liked to settle everything in one place. Every fall they go to industry events, where he held previews shows, the wine is poured and the majority is sold advertising space for the whole year. Best viewing windows, such as Thursday evenings – when are advertised weekend premiere films – are even sold for higher prices, although the number of viewers watching television constantly diminishing (and in line with this reasoning is not sufficient).

As in the tech industry is not exempt anyone for buying IBM, according to the old rules no one’s business in the advertising industry is not exempt as buying time on TV. Deliberate ignorance of agencies in the functioning of the new advertising industry is a result of their own rights: pay them a percentage of money spent on advertising. The less time advertising, the more it costs, the more free the more agencies seem, the more you spend, the more you earn. This is not an example of spiral benefits. Is a lethal trap.

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