I talked for a little while with John Battelle today, the founder of Federated Media (and co-founder of Wired, Industry Standard, author). CoasterBuzz was recently accepted into his "federation" for ad representation, and I have to say that he really, really gets it.
We talked about quite a few things, but what really impressed me is that he's taken what he knows about the magazine business and applied it in a logical way to the online world. That's something most every old-school media company (including Penton Media, my former employer) has largely failed to do. The most important distinction he made is that the advertisers themselves, and their agencies, haven't changed all that much. The truth is, they're not as interested in reaching a demographic or niche as much as the online ad industry has led us to believe. They still want to align themselves with brands and see an attractive package, not just that they reach x number of 18-34 males who like golf (because where do you find people like that? ;)). That's why they invited my site, doing just a million pages a month, along side of giants like Digg. Anchors like Digg's entertainment section are the cake, and CoasterBuzz is like the icing, the decoration that makes it even more attractive.
He said the typical ad network now deals in a commodity market. It's cheap inventory that's hard to sell because there's little indication about what the quality of the content is. I would go as far as saying that's precisely the reason that Google ads work: Your ad dollars go where the quality content is that people care about. The FM approach is more labor intensive than Google's, but it obviously does work.
He got called away while were talking, and said he'd like to talk more later. I'm very interested to hear some of the other things he has to say.