(Chris Dixon is right: here comes display advertising, and beyond our expectations if we can reinvent it.)

Stocks of knowledge to flows of knowledge.

Transactions to relationships.

Scalable efficiency to scalable peer-to-peer learning.

Paychecks to passion.

Incomes to outcomes.

What is the Big Shift?

Better yet, absorb the Big Shift – the somewhat unnerving and rapid move away from an economy based on transactions to one based on long term trust-based relationships – at today’s awesome opening panel at Supernova 2009.

I’d say grasping the Big Shift and its characteristics is going to be essential, and by grasping I mean deeply internalizing its meaning and movement and measurements, if we’re going to be able to create the businesses and institutions that first sustain us and then allow us to thrive in the next two or three decades.

How could you not be passionate about helping to create this shift? How could you not want to participate in a positive outcome? But to participate, you almost have to grow a new brain, a better skeleton and completely new muscles with some kind of bio-skin, but, if not that, one better at least take on a radically new outlook about what has value – what is value – and what creates it.

On that note, Lang Davison, who authored The 2009 Shift Index along with John Hagel and John Seely Brown, posted on Facebook today that he’s reviewing a proof of their upcoming book, “The Power of Pull” (out in March 2010). I’ll be gettin’ it.

(Watch this panel, yo.)

We were talking about marketing things on the Web, and she said “the best way to market something is to get people who love it to tell their friends about it.” We all know it, but it was clear to me she knew from experience what she was talking about.

If you should remember one thing when it comes to a healthy diet it’s probably: Sugar is bad for you!

And for Web marketing, that one thing: Create something worth talking about!

Right, right this has always been true. But the Web has brought the thing and the marketing of the thing closer than ever before. You can’t collapse one into the other, but in Web-life 2.5 they are deeply interpenetrating and symbiotic.

The Web is interactive from the core out through its many layers of hardware, software, and interface. And that holds true both between you and your audience and those people and their network. This is why your offering and the sharing of it (marketing) is much more intertwined than before the Web or Web-life 1.0. Interactivity is simply going to be much more integrated into what you make and the way people talk about it.

And that’s why you want to create something worth talking about . . . because marketing is built in.

Singers Amanda Palmer and Matthew Ebel created something worth talking about yesterday when they sang live for us on ustream.tv.

In a response to a live song Matthew had just done, Amanda tweeted:

So, I did, and it was completely original, and NOW, and awesome, and now I’m talking about it. You know it when someone has created something worth talking about. Now I want to know even more about them, now I want their music, now I want to tell my friends about them.

The marketing was built into the music, perfectly.

“Free” makes no sense at all if you’re talking about stuff being exchanged for money. Through this lens or framework, stuff cannot be free (there are only freebies).

It makes perfect sense, though, if the stuff is being exchanged for something more important than money, and that something is attention.

I know, calm down, but let’s get with it.

In the world we’re now in, this young, healthy information economy, attention is more valuable than money, So, there’s little choice, if we want to work in our own best interest and with economic forces, to invest in it, cultivate it.

It works like this. I wanted a great way to send invoices and track time. Soon, I found out about and signed-up for Harvest. Harvest gave me full access to its app for free, forever (the deal is 2 projects, 4 clients, unlimited invoicing for 1 user). Additional projects, clients, and so on require a monthly subscription.

Harvest was so easy to use (not just good, but great) I decided to test it by actually invoicing a client (no demo this). Successfully, beautifully accomplished. As a result, I had real data in the system (a live invoice), which I was able to play with to figure out tracking, my use cases, and collaboration.

Harvest got my attention. And they invested a lot to get it, to get it prior to my money, and to keep it.

The fact is lots and lots of information creates a lot less attention. Or as the economist Herbert Simon put it, attention is consumed by an information-rich environment. Once that happens, it’s gold.

Fine, one might say, but I don’t want to make attention, I want to make money. Sure, do it, and remember two things.

First, the money economy is now a subset of the attention economy. Money isn’t threatened, attention transcends and includes it. The attention economy couldn’t survive without the money economy; it’s the foundation. Money is here to stay.

Second, because money is a subset of attention you’ll generally make less per customer (as a user I’m already paying you with something else, right?), but the number of customers you have, with networks spilling into other networks, will likely be greater, and, the real beauty of it all, your cost of acquiring those customers can be shockingly low.

Craigslist serves as the poster child for this phenomenon: free to most users, 30 employees, $5-10M in costs, 100M in revenue. Now, what kind of capitalist are you if you’re not excited about those efficient margins? No industrial-era company can touch it.

Okay then, let’s not deny, defend, or rail against the attention economy (or, on the other hand, claim it replaces money) – it doesn’t make sense. Customers, like me with Harvest, are ecstatic with the result (and happy to pay with both attention and dollars), and those of us creating the services/products get to be smaller scale and yet radically profitable. Rejoice.

Also see:

• “Flipping abundance and scarcity,” Seth Godin
• “Chris and Malcolm are both wrong,” Brad Burnham
• “The Looming Attention Crisis,” Fred Wilson

. . . over the last eight years, companies have shifted $65 billion in annual spending away from traditional advertising channels and spent it on “page content, Web analytics, search engine optimization and site design.” Link.

One reaction, if you’re an ad firm morphing into something else, might be to try and get some of that business by adding a little analytics or design to your services. Which is okay.

But the problem with that is (a) it’s not easy to do any of them really well (b) it’s hard to package them all together so that your margin holds and (c) even if you get the first two things right the fees you can charge are always being deflated by the fact that the Web is ultimately a self-serve platform.

A better path (at least simultaneous) is to ask what all the businesses who were spending $65B on advertising, and who are now spending it on advertising of their own creation by ordering up specific services (. . . but $55B next year and $45B the year after that) actually want from that advertising. (What do they want?!)

Then, use everything about the Web that’s breaking your business model now (modular, real time, social, open, micro-transactional) to give it to them. Make it work for you. In other words, don’t chase the customer, surround them with their own reality. That’s the art of war.

It’s not that HypeM doesn’t already do a pretty good job of this with their “popular” list of songs marked with big red hearts, those “songs scoring the most favorites on The Hype Machine,” by users like you and me.

But with Twitter, they thought, you could potentially have a music chart generated by anyone who links to a HypeM song, no need to have an account with HypeM.

This took a couple of brilliant decisions on their part. First, they needed to value each Twitter user, which they’ve taken a good shot at with this formula (. . . and already trying to better it by asking for feedback from the math geeks):

round(( 1/3 * (twitter_followers / 10) ^ 0.5 ) * (twitter_followers / twitter_friends) * 10))

The formula weighs individual influence and group influence and puts a ceiling on how much influence one or the other can have. But, the key point is that I have a Twitter score, you have a score, anyone can have a score.

And when you tweet a song that is on HypeM, you and your score are added to a group for that particular song on the Twitter Music Chart. It rises based on the sum of those scores.

Very cool, but HypeM also took another step to make this chart even better, deeper. They used BackType, which aggregates comments from all over the Web, to suck in and interpret all of the tweets out there before using them. The result is that when someone uses a URL shortener (like bit.ly) to link to a HypeM song, BackType recognizes it and includes it in the useful pool of tweets.

Why care about this way of building a music chart? Because what people like, love, and discuss on the open Web, all of those needles in the haystack, needs to be gathered up to create something that didn’t exist when those sentiments existed by themselves. HypeM just gave us a great example of how to do it.

But, come to think of it, what can you do for a $1/day?, a micro-budget.

So far, only a handful of people have clicked on my ad and visited this site, but the quality of the traffic ain’t bad at all. Here are a few metrics after two days:

2.23 Pages/Visit

00:02:03 Avg. Time on Site

69.23% Bounce Rate

If people coming from my text ad stay for more than 2 minutes on average, look at more than 2 pages, and only bounce out 69% of the time, I’m going to keep spending that $1, work on creating better ads and putting them in better places . . . then slowly but surely increase my spend.

What could be better than being able to identify and pinpoint something I want now, knowing what other people think about it, and where it’s located relative to me. What’s it called?, what’s it like?, and where is it? – the basic components of local business ads.

For instance, what if I wanted a great organic salad in San Francisco? How to get it? You can do a search on Google Maps (e.g., organic salad near San Francisco, CA) or do the same on a service like Yelp.

Yelp had better results in my experience for this particular search and slightly more interesting reviews, but the ones on Google Maps were also good, and it gave me a better sense of where the place was and how I could get there.

More and more I think when people want to discover what’s available around them, they’re going to think, “map,” which online now additionally means peer review and info on proximity. And that’s a pretty cool way to find and be found.

Update: And there I was . . .

It’s unique as a display ad because it’s all text (and quite a bit of it), but very specifically designed to communicate clearly through the font, spacing, and color. It’s no Google text ad.

It’s text that’s been designed. It’s graphical text. I think we’ll see more of it.

Every time I ask the entrepreneurs to chart how what they offer fits in with the networks, exchanges, data providers, ad servers, optimizers, agencies, etc.  Inevitably, every one draws themselves in the center with the other players revolving around them.

. . . which is, this whole ad ecosystem is pretty complicated.

Naturally, entrepreneurs want to unify it – that’s their job, so to speak. And some of them will make progress.

But frankly I’m much more excited about the ones who are going to look at that ecosystem and decide to subvert rather than unify it.

When it comes down to it, we need new ways to create ads, do the creative, and share ads in places where people want to see them, which, yep, is where advertisers want to pay for them (places with great content and communities from branded sites to blogs to e-newsletters).

And if the new ways of doing those two things aren’t in the current ad ecosystem, then what are we really unifying, right?

Sure, advertisers want to have great reach at a fabulous price point, so that’s what all of the “networks, exchanges, data providers, ad servers . . .” have scrambled to provide. Scale! is the battle cry. And target!, which is another way of saying people don’t want to watch the ads, so we have to put them in the crosshairs.

But this bread ain’t going to rise, can’t rise, without the uncoerceable attention of a lot of people who check out an ad because it’s actually good. Good and timely. Everything follows from this little truth, if we really want a healthy ad ecosystem.

They’ve got our attention . . . now they should go for the kill, which means astonish me with an, yes, insight about how much easier/better my life is going to be with this car. You know, ’cause right now I’m impressed but not convinced.

For example, what what will the Insight do for me that Zipcar doesn’t?

Insight uses value words like “stylish,” “aerodynamic,” “fun,” and “right price.” Zipcar uses ideas like “wheels when you want them” and “meet your neighbors.”

Zipcar kills my resistance with these ideas just like AirBnB kills it with “rent by the night from real people.” Both give me a completely different way of moving in the world that’s environmentally friendly, unencumbered, cheap (but not low quality), and social.

What does the Insight give me?: insurance and a regular commute (with lower emissions). Oh, and a car payment. That’s mean but not far from the truth.

I grew up with Honda and love Honda, but if they want me to get into the Insight, the viral has to go all the way down to the car itself.

It means search has gone social or rather social media is now exerting a downward influence on search (and also display), and so Google has to define what it means to index the Web more broadly as pages and media and people, including the conversations people are having.

Today a search on “brooks jordan” only gives you one link to a profile that I’ve created (at the bottom of the page, and only if you’re logged into your Google account), which in itself feels like big change, but tomorrow it will be possible to do a more complex, multi-word search and expose my social graph and your social graph (i.e., connections and conversations).

It’s going to be us, after all, that are recommending products, people, and things, and whoever can expose those relationships in an unbiased way will be able to forget about the pretty much undifferentiated CPM and take CPC, CPA, and CPE to a new level.

If marketing has now become a game of relationshps, and individual people are best at playing it, then search, to have value, has to be social (as well as an index of information).

This line by Albert Wenger (and others like it) really got me salivating.

Albert:

But what could really accelerate that trend is the availability of an alternative to classic brand advertising. I believe that alternative is already with us but in its infancy — it is “peer-to-peer” brand advertising or “social” brand advertising. Brands (and social networks) that figure out how to get more consumers who are fans to genuinely recommend the product or service to friends will have the most effective brand advertising. That might involve a lot fewer dollars changing hands than any traditional brand advertising buy.

What’s happening to brand advertising is, of course, no secret. Here’s Bob Garfield in Ad Age:

The future is bright. But the present is apocalyptic. Any hope for a seamless transition — or any transition at all — from mass media and marketing to micro media and marketing are absurd.

Now is the time to experiment with how to support recommendations in social environments without ever losing the “genuine.” That is easy to say, but will be extremely hard to do . . . until some little outfit shows up that just knows how.

As a commenter on Albert’s post said: the trust that powers a genuine recommendation is going to have to be earned.

No, this display ad actually is content.

All of the display ads in this set take you to last.fm/presents, original, exclusive interviews with bands like MGMT and Yellow Magic Orchestra.

So, great material to work with . . . how does last.fm drop it into a display ad to make it most effective?

First, it asks a great question: Why is music important?

Then, it shows me one of the musicians in the background, so I immediately know that there’s a real person involved.

And, finally, I’m told that if I roll over the ad, I’ll find out a little about why he (Ben Goldwasser from MGMT) thinks music is important.

The question, the image of the person, and the call to action – i.e., roll over this ad to get an answer to the question – triangulate to attract your attention, to send you all the right signals that this is worth your time.

That’s not easy to do, although it looks incredibly simple when it’s implemented, and whoever came up with the concept and designed or produced it did a great job.

Even better, the roll over is totally consistent with the initial frame. It rewards you for your attention.

The above is just a screenshot, but when you roll-over it on the last.fm page Ben Goldwasser tells you “Like, a lot of times when I was feeling down and out, music really picked me off the ground. That, that’s important.”

He’s not just saying any old thing, he’s answering the question, right?

Brilliantly, if you roll off the ad the original frame that you see above comes back . . .roll back on and the interview with Ben Goldwasser picks up right where you left it. Very nice touch, interactivity that puts you in charge.

The ad ends with some creative, colorful branding that they also show you on the last.fm/presents page. And the final frame of the ad shows you a thumbnail that you can click to see the full interview for the band in the ad, but there are also two other thumbnails with different bands, if you prefer. Message: we got lots of bands and probably your band at last.fm/presents.

This is a five star display ad. It had a second or two to get my attention, get me to volunteer my roll over, and then somehow keep me entertained and willing to interact.

Their reward – and mine – is clicking through to see the full content, which I gladly did.

It’s great, potentially disruptive software, and everyone should have it who wants it. I thought I’d share what I learned during my install to make it even easier than it was for me on the next person.

WordPress MU

First, what is it? WordPress MU is the WordPress blogging software we all know and love except you can create as many blogs as you need to from one installation.

Do you have a team or network of people where everyone needs an individual blog (5, 10, 1000 blogs)? You can use WordPress MU. This is how WordPress, the organization, describes it:

WordPress MU, or WordPressµ, is the multi-user version of the WordPress blogging application, that allows you to run hundreds of thousands of blogs with a single install of WordPress, and is most famously used for WordPress.com.

Once you install WordPress MU, it’s all self-serve. Your folks surf to your domain (e.g., change.gov), sign-up just like any other website, a blog is generated for them, and away they go. Obviously, as the administrator of this blog network, you can set some permissions (by clicking or unclicking a few check boxes) so that users have more or less control over their blog.

Giving Back

Why am I posting about this?

• I got off track installing WordPress MU but wouldn’t have if a few things had been clearer
• The Web giveth, and I’m giving back
• If Dave Winer can explain EC2 to poets, the same can be done for WordPress MU
• The revolution will not be televised

Installing Basic WordPress

If you don’t know, WordPress for a single blog is super simple to install. In fact, it’s so simple WordPress calls it the “famous 5-minute install.” And that’s true.

You can read their six steps for doing the 5-minute install by clicking the link just above, but the condensed version can be said in a single (run-on) sentence:

Find a Web host and create a database within your account, then download WordPress and type the name of your database and your login/password into one file (called “wp-config.php”), upload all of the WordPress files to your hosted account, and then point your browser to a url (http:://example.com/blog/wp-admin/install.php) so a WordPress script can do a little alignment magic behind the scenes.

That’s it.

I’m not saying that anyone could install a WordPress blog guided by my sentence (better to use the WordPress instructions), but the point is there’s not a lot to it.

Installing WordPress MU In Six Easy Steps

So, that’s WordPress. How is WordPress MU different to install?

Seriously, not much. The biggest difference is that you don’t type the name and login/password of your database into the configuration file (wp-config.php), instead you type that information into a setup page in your browser after you’ve uploaded the WordPress MU files to your hosted account.

In my cae, I knew the WordPress files needed to talk to the database in my hosted account . . . just like a WordPress (single blog) installation, so my impulse was to give the configuration file the information to do that. But with WordPress MU this step is done last, in the browser, via a form.

What I’m saying is that once you’ve downloaded the WordPress MU packet of files, you never touch them. You just upload them to your hosted account.

After you upload the files, you point your browser to your domain (e.g., example.com/index.php), which causes a Web form to appear. Then you enter the name and id/pass of your database. You also have to enter a “hostname,” which in my case was “mysql.example.com,” but what your hostname is called will be obvious once you setup your database.

So, installing WordPress MU is a six-step process:

1. Create an account with a Web host (I used DreamHost)

2. Create a database (and get the hostname, the database name, and the id/password)

3. Download WordPress MU

4. Upload WordPress MU to your hosted account from your desktop with an FTP client

5. Point your browser at your domain (“example.com/index.php”) and fill-in the Web form with the database information

6. Log-in as the administrator and choose your settings

You should follow the WordPress MU documentation on how to do this, but, again, the point is there’s really not much to it. The biggest obstacle isn’t technical it’s, in a word, the unknown. But take my word for it, installing WordPress MU is completely doable for the technical and non-techical alike.

Plus Two Easy Prep Steps

What’s left? In addition to the six steps above you have to do a couple of prep steps to make the install work correctly, and since some of the words are unfamiliar, it can make the whole thing seem like a big deal.

But it’s not. Here’s why.

The first prep step after you’ve created your account (and purchased a domain, of course) is to ask your host to enable “wildcard subdomains” for your domain. What is this? This wildcard configuration allows WordPress MU to generate the url for a new blog on your network (e.g., example.com/mynewblog).

But, the nice part is your host’s support team does this for you (or it may be possible to do it manually, if you wish). Send them an email, done.

Second, after you’ve uploaded your WordPress MU files from your desktop to your hosted account through your FTP client, you need to change what are called permissions on two folders: the primary folder that all of your files are in and the content folder (i.e., “wp-content”).

You change the permissions on the folders so that your hosted account can interact with, or write to, your files during installation. But, you change them back after you’ve filled in and submitted the Web form in your browser and the installation is complete so they can’t be written to, which makes intuitive sense, right?

Without getting into too much detail, permissions on your folders correspond to numbers. The numbers “777″ mean your hosted account has permission to “write” to the files in your folders and “755″ means they don’t. So, change the permission numbers from 755 to 777 on your two folders right after you’ve uploaded your WordPress MU packet – do the install – and then change them back to 755.

How do you change permissions on a folder? Your FTP client will explain exactly how to do it. Go to the help section and search for “change permissions” or “setting permissions.” If your FTP client doesn’t, get a new one. Again, it is easy, easy once you understand the purpose and the goal.

Okay, here are the six steps for installing WordPress MU again, this time with the two prep steps:

1. Create an account with a Web host

1a. Prep: Enable wild-card subdomains (have your host’s support team do it for you)

2. Create a database (and get the hostname, the database name, and the id/password)

3. Download WordPress MU

4. Upload WordPress MU to your hosted account

4a. Prep: Change the permissions on your main folder and content folder from 755 to 777 with your FTP client (use the instructions in your FTP client)

5. Point your browser at your domain (“example.com/index.php”) and fill-in the Web form with the database information and click submit (then change your folder permissions back to 755)

6. Log-in as the administrator and choose your settings

Your Situation May Be Different But Not Very

In the end, this is all it took for me to install WordPress MU, and if you gain anything from this post I hope it’s that nothing in the install process should deter you from using this blogging platform for multiple users. Yes, there are a couple of things that might be different about your host, or your FTP client, or your errors, but the above is at the core of any install, 95% there.

It was @andrea_r who got me out of my particular dead end with her free e-book on “Installing WordPress MU” and made me realize it can be done almost as quickly as the original WordPress install. This is where I’d go for help if I got stuck.

Rock the MU.

My question is do you think what’s happening on the Web right now, with communications, is as powerful a force as Citi, CDOs, and all the other superbugs?

I mean, think about it. It’s not only SXSW the Web has going for it. It’s also Instructables, AirBnB, and guides bringing key people to unspoiled rivers.

Adidas hasn’t forgetten what cool is – or could be – and we’re starting to hack education. You can play music on the iPhone or make it through videos on YouTube. Meanwhile, people are getting together to pick up trash for an entire country.

The novelty is everywhere and goes on and on. Will the Web ever quit? Pressure from the downturn only seems to make the activity stronger.

Maybe in spite of The Great Disruption something’s happening right now that we’re not entirely aware of, call it a Great Coordination. Which one will be stronger in five years? I’m betting on The Great Coordination by a whisker.

It’s not pregiven. So, don’t stop doing what you’re doing. But if we start to become aware, as Tim says, of “moving from “sensing” to “reacting,” from “cognition” to “coordination” and group action,” we might just reseed our economy and establish a culture to match.

This was preceded by, as we’re now painfully aware, the consumer economy, which was symbolized by the credit card.

Saffo points out that the consumer economy arose after WWII, powered by workers (and savers), when companies realized that they were producing more than people could consume. What to do?

So, three economies: producer, consumer, creator.

This isn’t news to most of us, but what’s interesting, in my mind, is to realize, absorb, how central marketing (and sales) was to making the consumer economy viable. It literally shaped the world’s awareness and attention. And TV was at the center of this effort to inflame the desire for more.

What happens when a society runs out of room to make unlimited things and, simultaneously, the method of communicating what’s worth having splits into a zillion threads? Like overnight.

We are about to find out. And I think, in general, we underestimate the depth and speed of change caused by digital/social media. This is why I strongly believe that display advertising on the Web is going to get turned on its head along with so many other things . . . no matter how much we kick and scream and insist it’s not.

Display (and search and social) is telling a new organizing story, and this time we’re all talking back.

It’s an interesting mix of short-form video (15 seconds long), mini banner, and longer-than-usual text. I found it at the bottom of an RSS feed for ZDNet’s Between the Lines blog on a “White House 2.0” piece.

I never shied away from this ad; it didn’t look like an ad, smell like an ad, or talk like an ad. It was content all the way. Sure, everyone likes whales, but that is so not the point.

(See a larger image here.)