Red ocean and blue ocean strategy: scaling a business with paid ads

The marketplace is composed of two oceans: Red Oceans and Blue Oceans. In the case of Google’s Adword platform in 2003 and FaceBook’s platform in 2007, think of these as the Blue Oceans. In regard to Blue Oceans, think of a nice blue water with plenty of free space for the fish to explore and grow. A Blue Ocean advertising market allows for smaller guys to scale a business by providing fantastic ROAS. Soon everybody else jumps into the sea. And the Fortune 500 companies’ strategy for advertising is “who can pay the most, wins”. This Blue Ocean soon becomes full of both fish and big sharks, and the blue waters soon turn red with blood. Those fantastic returns have disappeared, and the advertising costs have increased to the heights which they are at now, as these mediums are the premier advertising platforms in a Red Ocean market.

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