By Tom Bradley

Many of the powerful tech and social media companies generate most of their revenues from advertising. Google (including YouTube), Facebook (Instagram), Twitter and LinkedIn are the most prominent, but I’m reading every day about new companies that have built a platform to deliver advertising. Twitter and Pandora recently reported earnings and talked about how advertising revenue is going to grow.

As we watch these companies develop, it will be interesting to see if there is enough advertising dollars to go around, and whether readers, viewers and subscribers eventually turn a cold shoulder to the constant barrage.

There are other businesses that are increasingly counting on advertisers to pay the bills. Lori came to a Raptors game with me at the Air Canada Center last week and marveled at the degree to which advertising has taken over the visual experience. Every place you look there’s an ad or company logo. Companies are not just looking at mobile devices and video games to get their message out there.

Where will the advertising dollars come from?

It seems almost certain that the conventional media (newspapers, banner ads and television) will continue to lose market share to the new platforms. Dollars currently being spent on the Globe and Mail or ‘The News at Six’ will be re-allocated to Grand Theft Auto 22 and the back of a referee’s jersey.

And if some of the new providers can improve advertising effectiveness through enhanced analytics and precise targeting – i.e. deliver more revenue per advertising dollar – it makes sense that the advertising pie will grow substantially. If P&G and Molson get more bang for their buck, they’ll spend more bucks.

It seems to me that something has to give. Either conventional media as we know it will disappear more quickly than expected, or the total capitalization of the new media players will go through a correction. It will likely be a lot of both.

In the meantime, it’s time that Neil, David and I go back to the drawing board and retool the Steadyhand model. I can see it now – no management fees, just a wall of RBC and TD ads on the Blog and Fund Price pages. MERs are so yesterday. Mobile is where it’s at.