Silicon Valley’s pivot to paid

Tech’s marriage of convenience to the ad industry hits the rocks

Tech’s pivot to paid

The first story I wrote after inheriting the online advertising beat at Internet News was based off a talk then-Google CEO Eric Scmidt gave at an IAB event in 2002. At the time, nobody quite knew how powerful of a machine Google had created with AdWords. It wasn’t until its IPO in 2004 that the full extent of the power of the paid search model was evident. Schmidt spent much of his time lecturing the assembled to “stop scaring users.”

I think about that a lot because through the years I’d always come across the divide between the Silicon Valley mindset and Madison Avenue. The consumer tech industry viewed the ad industry as mostly an anachronism, waiting to be optimized. Schmidt himself described it as “the last bastion of unaccountable corporate spending.” These were math people. They saw the ad industry mostly as a collection of lightweights. The paid search model was applying engineering rigor to a squishy world where people took seriously the idea of creating “lovemarks” for cereal, staging a parade of Tony the Tiger and fellow ad mascots and having multiple halls of fame for “brave” marketers.

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