Niche Markets, Nice Media, Nimble Manufacturing

Not only does the web allow individuals to connect with other individuals who share similar – even impossibly unusual – interests, but it also allows marketers to identify those individuals as members of a specific niche market and, more importantly, connect with them.

This is not just because marketers have more data than ever and thus can find those niche markets, but it’s also that marketers can now offer niche markets a product that suits them thanks to more and more nimble manufacturing practices. We’re not just seeing more fragmented niche markets, but more fragmented SKUs as well.

As a result of media fragmentation, it’s taking businesses longer to find places to spend their advertising budget. Despite the continued reduction in share many traditional channels like network television continue to charge more and get away with it. The death of mass advertising might be near, if not for the sheer amount of capital that has no other place to go – yet.

Once a clear path to fragmented communities is laid, advertisers will realize the unbelievable conversion rates that can be had by targeting so precisely. (This is not about vertical ad networks, for they are still sliced too thick.) The cost will rise for online advertising based on the volume of viewers in precisely targeted niche communities. This will suck capital out of less effective scattershot mass advertising. That means the most rewarding time to play is now. At least until publishers figure out how to drill down to the levels possible. The moment that happens the upside will vanish.

For now, you need to work site by site and section by section on push advertising efforts in the interactive space. But prior to undertaking those types of light seeding efforts, you should first invest in building up your online ecosystem so that you’ll get the most value possible from the capital you deploy. That’s the underlying message of the Honey Pot, really: the best way to deal with the diminishing returns of “push” advertising is to enhance your online ecosystem so that it supports a “pull” strategy.

Just think what you can do to actually improve your product with that leftover capital you no longer waste on mass advertising.