My name is Spencer Lazar. I am a venture capitalist at General Catalyst. I grew up with the internet, spend my life thinking about how it can make our lives better, and work with world-class entrepreneurs to affect that chanage. NYC is my home. This is my blog.

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Publicity is Not Cheap 

Last week, John Battelle observed something a bit unsettling to me.  As one of the founders of Wired Magazine and CEO of web publishing & marketing juggernaut Federated Mediahe is somewhat of a force in the technology ecosystem. Artfully squeezed into 140 characters, Battelle observed:

"Very int. idea at #foocamp: we are in the first ever economy where privacy is dear, publicity is cheap. Large implications. Used to be the reverse." 

This is something of a summary of a broader argument that friend Sam Lessin has been making for a while now (see his post from 01/17/10).  While I cannot be sure that Sam is the ultimate source here, given that they were both at Foocamp and that Sam is a fantastic curator of ideas with "large implications" (go to his Y+30 events to learn more), I think that it is fair to lump their arguments together.  My working definition of publicity is the means by which an entity communicates with the broadest of audiences.

The publicity is cheap argument is based on the shifting microeconomics of content in the digital age.  If Christopher Columbus wanted to broadcast a message to the entire world, it would be a lot cheaper for him to use Twitter than to turn around the Nina, the Pinta, and the Santa Maria.  This much I agree with.  Once Columbus composes his tweet, the incremental cost of sharing that Tweet to a 2nd, 3rd, and 4th person is low enough, that Twitter does not even charge for pushing content through its pipes.  

Shifting relative marginal costs are one thing, but costs of mass distribution are another. Marginal cost math assumes that the piping is in place for me to push my content out into the world.  Britney Spears (5,226,390 Twitter followers) and Ashton Kutcher (5,192,937 followers) have deeply established brands that have spent millions on personal marketing.  The reason that the marginal cost economics have played out so well at scale for them is because their 'piping' is in place.  But what if they wanted to reach 150MM people (~2.0% of the "entire world" & 1.5x the number of registered Twitter users)? That would be a lot harder, and correspondingly significantly more costly.  

Now think about being an independent recording artist trying to get your latest album into the world.  You might turn to social media to begin to build your fan base, but after you have gotten your friends & family to tweet about it and whatever industry contacts you have are exhausted, then publicity starts to get tough. Publicity economics for any content producer only scale according to the size of their underlying distribution infrastructure.

Low relative marginal cost publicity economics are also inversely proportional to the amount of noise that is being simultaneously being pushed through the global system.  The more Britneys and Ashtons there are in the world, the harder it will be for even other highly public figures like Oprah (3,726,172 followers) to get their messages across - let along budding musician "Joe Stummer."  And, the amount of noise in the public domain only appears to be getting worse - think Vuvuzela. It feels like everyone has a message, and while attention spans are nimble, they are unlikely to be able to keep up.

Publicity is certainly relatively cheap compared to the days of Christopher Columbus - or even simply the pre-internet era.  My feeling, however, is that instead of thinking about the marginal costs to publicity asymptotically approaching zero, they will soon cease to fall further and may even increase over time. 

What we saw with the emergence of Twitter and Facebook was the complete breakdown of traditional one-to-one & one-to-many communication paradigms.  They were not the creation of a better emailing services or the launch of new cable news channels.  As such, there was a complete land-grab for would-be costly distribution rights at a time when very few people understood the mediums.  This was genius insight of brands like CNN and individuals like Ashton (even if implicit).  Until a new paradigm shifting/land-grab inducing media platform is launched - publicity is only going get more expensive.


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