A Reuters story from last Friday made the bold prediction that not everybody will get rich from online advertising.

The gist of the story is that although ad dollars are flowing to online marketing, there are so many companies rushing to launch advertising-supported web properties that at some point there will too many ad-supported properties for the ads to actually support.

I’m going to go ahead and file that under “Things I just assumed were true.”

Using basic economics principles (unlike psychology, I did take econ):

1) Where there is demand, there will be supply. Because there is a lot of demand for online properties on which to advertise, new web properties are springing up every day.

2) Markets are not perfectly efficient. Supply and demand will almost never exactly match up. Because there is a lot of demand for website advertising space and some websites will make a lot of money, it is a certainty that too many people will get into the business.

That’s not to say that people should not be launching new ad-supported web ventures. Quite the contrary, one reason Reuters wrote an article is that there is a lot of demand for quality ad placements online. But the emphasis is on “quality.” Ad-supported ventures, both large and small, will fail because they don’t connect with people. With all the good ideas and great new websites, there will be turkeys. And the turkeys will fail.

There will also continue to be winners, and the winners will succeed. The real issue for new websites is not to worry that there will be winners and losers, but rather to focus on creating value through a quality website that connects with people. If a website does that, the pageviews and ad impressions will come, and so will the advertisers.

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